Implications

The fact that the option to abandon has value provides a rationale for firms to build the flexibility to scale back or terminate projects if they do not measure up to expectations. Firms can do this in a number of ways. The first, and most direct way, is to build in the option contractually with those parties that are involved in the project. Thus, contracts with suppliers may be written on an annual basis, rather than long term, and employees may be hired on a temporary basis, rather than permanently. The physical plant used for a project may be leased on a short term basis, rather than bought, and the financial investment may be made in stages rather than as an initial lump sum. While there is a cost to building in this flexibility, the gains may be much larger, especially in volatile businesses.

Retirement Planning For The Golden Years

Retirement Planning For The Golden Years

If mutual funds seem boring to you, there are other higher risk investment opportunities in the form of stocks. I seriously recommend studying the market carefully and completely before making the leap into stock trading but this can be quite the short-term quick profit rush that you are looking for if you am willing to risk your retirement investment for the sake of increasing your net worth. If you do choose to invest in the stock market please take the time to learn the proper procedures, the risks, and the process before diving in. If you have a financial planner and you definitely should then he or she may prove to be an exceptional resource when it comes to the practice of 'playing' the stock market.

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