A project has certain cash flows today of $1, growing at 5% per year for 10 years,
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A project has certain cash flows today of $1, growing at 5% per year for 10 years, after which the cash flow is constant. The risk-free rate is 5%. The project costs $20 and cash flows begin 1 year after the project is started. When should you invest and what is the value of the option to invest? Discuss briefly.
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If we invest at time T 10 the NPV at time T is constant and equal to If we in...View the full answer
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