What is option value (of project)?

Q: Which is the better investment option?

A: The process of finding the present value using the future value, interest rate and the compounding…

Q: What is the Future Value?

A: Future Value: It represents the future worth of the present amount and can be estimated by the…

Q: What is investment timing option?

A: Option with reference to investment or project refers a significant option that can affect the…

Q: Define time value of an option

A: Answer: In addition to its intrinsic value, the time value of an option is the part of the premium…

Q: main investment in an optimal portfolio

A: Optimal portfolio helps to minimize the risk for a give rate of return or its helps to maximize  the…

Q: Describe about the Option-pricing models?

A: The option pricing model utilizes factors (stock value, exercise price, volatility, interest rate,…

Q: What is the present value index for Project A?

A: Present Value Index: It represents the ratio of the project's net present value to the initial cost…

Q: How does an efficient portfolio relate to a feasible portfolio?

A: PortfolioSets of assets are termed as a portfolio. A portfolio comprises the number of bonds,…

Q: What is the total investment approach?

A: Total Investment Approach: In the Total Investment Approach, there is a risk-return tradeoff in the…

Q: In a qualitative analysis, what factors affect the value of a real option?

A: An alternate choice that is accessible to the organization's managers taking investment…

Q: What is the y risk-free investment?

A: Risk-free rate of return is the rate of return that an investor expects from an investment in any…

Q: What is required // calculate the required rate of return with an opinion on acceptance or rejection…

A: Rate of return is the return is the return received from an investment. It is the real return…

Q: What are the best short-term and long-term investment strategies going forward into the future?

A: Short term investment strategy – Those investment that are usually traded for upto a span of 3 years…

Q: What are the pitfalls of project and portfolio?

A: Project portfolio analytics are the tools, algorithms, and heuristics necessary to evaluate…

Q: What is in-the-money option?

A: Option is a financial instrument that gives the right to buy/sell an underlying in future date at a…

Q: what are the benefits of combining Projects into a Portfolio?

A: A portfolio is a collection of financial investments like stocks, bonds, commodities, cash, and cash…

Q: Define each of the following terms: i. Investment timing option; growth option; abandonment option;…

A: Investment timing Option – This is one of the real options used in capital budgeting that gives the…

Q: Explain Estimating Development Cost and Interest Carry?

A: INTRODUCTION Estimating development cost in project management is the process of forecasting the…

Q: What is the potentially acceptable investment alternative?

A: An alternative investment is a financial asset that doesn't can be categorized as one of the…

Q: Briefly describe what an investment timing option is and why such options are valuable.

A: There are various time arises where the company need to choose between  in order to make the…

Q: What is project financing?

A: Project financing is an opportunity to finance long-term, nil, or restricted capital accessible to a…

Q: What is the initial investment plus interest?

A: The total of initial investment and interest will give the total value or worth of the investment…

Q: What is a minimum attractive rate of return (MARR)?

A: Definition: Minimum Attractive Rate of Return (MARR): It is the minimum rate of return on the basis…

Q: What is the net present value (NPV) of this opportunity?

A: Net present value (NPV) is the contrast between the present value of money inflows over some…

Q: When is a project in Need for an External Interest Rate?

A: When net cash flow that is generated by the project during the project’s life is reinvested, then…

Q: What is the relationship between the efficient portfolio and the feasible portfolio?

A: An efficient portfolio can be defined as portfolio which maximizes return for given level of risk or…

Q: What are the shortcomings of the internal rate of return criterion? How do you make an investment…

A: Internal rate of return is the discount rate at which the present value of the future cash flow and…

Q: What is the criteria to accept a project based on the net present value and the internal rate of…

A: Net present value (NPV) Is the difference between present value of all cash inflows and initial…

Q: How do the Analysis Period Equals Project Lives?

A: It is PW analysis's best situation. Set the study time to suit the lives of options, in which all…

Q: Can we consider Project Risk by Discount Rate?

A: The discount rate is an interest rate that is used in computing the present value of the future cash…

Q: What is the payoff to call option buyer and seller?

A: Call option A call option is referred to as the financial contract which provides its holder an…

Q: How can we consider the Future Worth and Project Balance?

A: The question is based on the concept of evaluation of long term investment, future worth and project…

Q: What is the portfolio's return?

A: The total investment returns produced on individual assets multiplied by the weight class of that…

Q: What is future value interest factor?

A: Introduction: The future value is the value of single present amount accumulated at a rate of…

Q: What is meant by an investment project’s internal rate of return? How is the internal rate of return…

A:

Q: What is optimal portfolio?

A: One that minimises the risk for a given level of return or maximises the return for a given level of…

Q: What is the buy option?

A: A buy option involves two types which are : Buy call option Buy put option

Q: to put option buyer or hol

A: A put option is an instrument which provides its holder an option to sell an underlying asset on a…

Q: What is the portfolio investment concept?

A: Portfolio is a group of stock, shares and bonds owned by the investors. It is a combination of asset…

Q: How can we Consider Project Risk by Discount Rate?

A: In corporate finance, a discount rate is the rate of return used to discount future cash flows back…

Q: How is a future worth yield?

A: Future worth yield is equals to future return on a particular amount. Future value is the value of…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.