Business, 28.05.2020 05:03, jeovontamarley

You are considering a project which has been assigned a discount rate of 7 percent. If you start the project today, you will incur an initial cost of $3,300 and will receive cash inflows of $2,100 a year for 2 years. If you wait one year to start the project, the initial cost will rise to $3,520 and the cash flows will increase to $2,457 a year for 2 years. What is the value of the option to wait?

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You are considering a project which has been assigned a discount rate of 7 percent. If you start the...