Multiple Choice
A project has been assigned a discount rate of 12 percent.If the project starts immediately,it will have an initial cost of $480 and cash inflows of $350 a year for three years.If the start is delayed one year,the initial cost will rise to $520 and the cash flows will increase to $385 a year for three years.What is the value of the option to wait?
A) $.70
B) $1.08
C) $1.67
D) $2.20
E) $.20
Correct Answer:
Verified
Correct Answer:
Verified
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