You are the manager at Founders Inc. You are deciding on a project that can be accepted
Fantastic news! We've Found the answer you've been seeking!
Question:
You are the manager at Founders Inc. You are deciding on a project that can be accepted today or a year from now. If you start the project today it will cost, you $720 and the cash inflows of $525 a year for three years. If the start is delayed one year, the initial cost will rise to $832 and the cash flows will increase to $616 a year for three years.
What is the value of the option to wait if the discount rate is 12 percent?
Related Book For
Financial management theory and practice
ISBN: 978-0324422696
12th Edition
Authors: Eugene F. Brigham and Michael C. Ehrhardt
Posted Date: