what i have been able to understand from ur previous posts on this is as follows:
1: for delay options
the answer we get from BSOP is inclusive of the NPV and it represents the OVERALL VALUE OF THE PROJECT. correct?
seeing that the call value is 7.83m, this is the overall value of the project and the actual value of the option is 7.83-4=3.83m. correct?
2:
can u pls tell me if this also holds for expand and abandon options? i.e. the figure we get from BSOP is the overall value of the project?
thanks
Ask the Tutor ACCA AFM
Digunder part (b)
Yes to the first.
For expand or abandon then the answer from BSOP is the value of the option.
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