Your Perfect Assignment is Just a Click Away

Starting at $8.00 per Page

100% Original, Plagiarism Free, Customized to Your instructions!

glass
pen
clip
papers
heaphones

Future Enterprises is considering building a factory that will include an option to expand operations in three years.

Future Enterprises is considering building a factory that will include an option to expand operations in three years.

Future Enterprises is considering building a factory that will include an option to expand operations in three years.

Part 1: 

Future Enterprises is considering building a factory that will include an option to expand operations in three years. If things go well, the expansion will have an expected value of $10 million and will cost $2 million to undertake. Otherwise, the expansion will have an expected value of only $1 million and will not take place. What information would we need in order to analyze this capital budgeting problem using the traditional NPV approach that we would not need using option valuation techniques?

Note – Please note that the requirement is to post your Initial Response (250 words). Make sure you write these answers by conducting some research and cite both textbook and external credible sources. 

Part 2:

Please answer the following Questions.

1. What are the five variables that affect the value of an option, and how do changes in each of these variables affect the value of a call option?

2. What does the seller of a put option hope will happen?

3. What is the value of a call option or a put option if the stock price is zero? What if the stock price is extremely high (relative to the strike price)?

4. List and describe four different types of real options that are associated with investment projects.

5. How are options related to the agency costs of debt and equity?

 Note:

– Note that each question should be answered in a minimum of 200 words.

– Be typed, double spaced, using Times New Roman font (size 12), with one inch margins on all sides and heading; citations and references must follow APA format. Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. 


"Place your order now for a similar assignment and have exceptional work written by our team of experts, guaranteeing you A results."

Order Solution Now

Our Service Charter


1. Professional & Expert Writers: Eminence Papers only hires the best. Our writers are specially selected and recruited, after which they undergo further training to perfect their skills for specialization purposes. Moreover, our writers are holders of masters and Ph.D. degrees. They have impressive academic records, besides being native English speakers.

2. Top Quality Papers: Our customers are always guaranteed of papers that exceed their expectations. All our writers have +5 years of experience. This implies that all papers are written by individuals who are experts in their fields. In addition, the quality team reviews all the papers before sending them to the customers.

3. Plagiarism-Free Papers: All papers provided by Eminence Papers are written from scratch. Appropriate referencing and citation of key information are followed. Plagiarism checkers are used by the Quality assurance team and our editors just to double-check that there are no instances of plagiarism.

4. Timely Delivery: Time wasted is equivalent to a failed dedication and commitment. Eminence Papers are known for the timely delivery of any pending customer orders. Customers are well informed of the progress of their papers to ensure they keep track of what the writer is providing before the final draft is sent for grading.

5. Affordable Prices: Our prices are fairly structured to fit in all groups. Any customer willing to place their assignments with us can do so at very affordable prices. In addition, our customers enjoy regular discounts and bonuses.

6. 24/7 Customer Support: At Eminence Papers, we have put in place a team of experts who answer all customer inquiries promptly. The best part is the ever-availability of the team. Customers can make inquiries anytime.