Wilson's Antiques Is Considering a Project That Has an Initial

Multiple Choice

Wilson's Antiques is considering a project that has an initial cost today of $10,000. The project has a two-year life with cash inflows of $6,500 a year. Should Wilson's decide to wait one year to
Commence this project, the initial cost will increase by 5 percent and the cash inflows will increase
To $7,500 a year. What is the value of the option to wait if the applicable discount rate is 10 percent?

A) $1,006.76
B) $1,235.54
C) $1,509.28
D) $1,606.76
E) $1,735.54