Difference between revisions of "Capacity option"
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| − | + | [[Capacity option]] is a [[financial option]] that allows a company to change the capacity of its output in response to changing market conditions. This includes the option to contract or expand production. It also includes the option to abandon a project if market conditions deteriorate too much. | |
==Definitions== | ==Definitions== | ||
According to [[Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition)]], | According to [[Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition)]], | ||
| − | : | + | :[[Capacity option]]. Allows a company to change the capacity of its output in response to changing market conditions. This includes the option to contract or expand production. It also includes the option to abandon a project if market conditions deteriorate too much. |
==Related concepts== | ==Related concepts== | ||
Latest revision as of 07:02, 30 October 2019
Capacity option is a financial option that allows a company to change the capacity of its output in response to changing market conditions. This includes the option to contract or expand production. It also includes the option to abandon a project if market conditions deteriorate too much.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Capacity option. Allows a company to change the capacity of its output in response to changing market conditions. This includes the option to contract or expand production. It also includes the option to abandon a project if market conditions deteriorate too much.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
