Why must real options have positive value? (select all the choices that apply.)
a. real options must have positive value because they are only exercised when doing so would increase the value of the investment.
b. if exercising the real option would reduce value, managers can allow the option to go unexercised.
c. real options must have positive value because they can always be sold to recover the initial investment.
d. having the real option but not the obligation to act is valuable.

Garrett is an executive vice president at samm hardware. he researches a proposal by a larger company, maximum hardware, to combine the two companies. by analyzing past performance, conducting focus groups, and interviewing maximum employees, garrett concludes that maximum has poor profit margins, sells shoddy merchandise, and treats customers poorly. what actions should garrett and samm hardware take? a. turn down the acquisition offer and prepare to resist a hostile takeover. b. attempt a friendly merger and use managerial hubris to improve results at maximum. c. welcome the acquisition and use knowledge transfer to impart sam hardware's management practices. d. do nothing; the two companies cannot combine without samm hardware's explicit consent.