A friend thinks you can answer this question about Real Options Theory
You're evaluating two paths to enter a new geographic market. Path A: commit $50M now to a full national launch (NPV: +$15M). Path B: spend $4M on a single-region pilot that, after 12 months, gives you the right to either expand nationally for $46M or abandon for negligible cost. Underlying market demand is highly uncertain. Which path is structurally more valuable, and why?