Multiple Choice
Wilson's Antiques is considering a project that has an initial cost today of $14,000.The project has a life of 2 years with cash inflows of $9,500 a year.Should Wilson's decide to wait 2 years to commence this project,the initial cost will increase by 3 percent and the cash inflows will increase to $11,000 a year.What is the value of the option to wait if the applicable discount rate is 12 percent?
A) $1,269.26
B) $1,335.54
C) $2,115.08
D) $1,606.76
E) $1,935.54
Correct Answer:
Verified
Correct Answer:
Verified
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