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# MCQ- Depreciable base, real option

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Need help with assignment.

A stock is currently selling for \$25. A 6-month call option on the stock has a strike price of \$30 and sells for \$0.50. Calculate the exercise value of the option?
\$0.00
\$4.50
\$5.00
\$24.50
none of the above
Which of the following is not a real option?
The option to switch the type of vehicle manufactured in a plant
The option to expand into a foreign country
The option to buy shares of stock if its price goes up.
The option to abandon a project.
none of the above
The current price of a stock is \$22, and at the end of one year its price will be either \$27 or \$17. The annual risk-free rate is 6.0%, based on daily compounding. A 1-year call option on the stock, with an exercise price of \$22, is available. Based on the binominal model, what is the option's value?
\$2.99
\$2.70
\$2.43
\$3.29
\$3.62
A company purchases equipment for \$5 million, incurs shipping costs of \$30,000 and installation costs of \$50,000. It also requires additional net working capital of \$100,000. What is the depreciable base?
\$5,000,000
\$5,180,000
\$5,080,000
\$5,030,000
none of the above
Which of the following is an example of a real option?
An option to buy stock at a specified price for a specified period of time
An option to sell stock at a specified price for a specified period of time
An option to invest in a project today or to wait a year.
An option to buy either an American or European option
none of the above