A project is worth $12 million today without an abandonment options. Suppose the value of the project
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- A project is worth $12 million today without an abandonment options. Suppose the value of the project is $18 million one year from today with high demand and $8 million with low demand. It is possible to sell off the project for $10 million if the demand is low. Calculate the value of the abandonment option if the discount rate is 5% per year.
- $1.03 million
- $2 million
- $1.9 million
Related Book For
Managing in a Global Economy Demystifying International Macroeconomics
ISBN: 978-1285055428
2nd edition
Authors: John E. Marthinsen
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