Use the language of real options to explain why riskier firms must pay higher interest rates when they borrow money Why must manager intuition be part of the investment-decision process regardless of...

Use the language of real options to explain why riskier firms must pay higher interest rates when they borrow money

Why must manager intuition be part of the investment-decision process regardless of a project’s NPV or IRR? Why is it helpful to think about real options when making an investment decision?