Concept Check

6.1: No.
The money you spent acquiring the resource is a sunk cost. The cash flows you will lose in the future by using the asseet is an opportunity cost.

6.2: 11.75%
The synergy benefits accrue completely to the bookstore. If the synergy had been to both, then the cash flows would have to be discounted at different rates.

6.3: No
The value of a real option accrues almost entirely from early exercise. Once the option is exercised, it becomes a regular project.

6.4: less than $51.02 million
The value from the option pricing model is a fair value. You would like to buy it for less.

6.5: It should be zero.
The exclusive rights to the project are worthless unless they allow the firm to earn excess returns. The competitive nature of the business might make that difficult.

6.6: assets where the technology is volatile, though the likelihood of success is low
Variance increases the value of options, which is what the patents that emerge from the R&D become.

6.7: It may increase or decrease..
The net effect will be determined by whether the loss in the value caused by the passage of time will be overwhelmed by the potential gain in value from the asset (project) becoming less valuable (as cash flows are less than expected)