Question: DR. P is considering a new project based on the information below. However, the firm has an option to abandon the project after the 2nd
DR. P is considering a new project based on the information below. However, the firm has an option to abandon the project after the 2nd year. What is the Expected NPV of the project if they abandon Scenario 3at the end of year 2? WACC for the project 0.096 data in thousands 0 1 2 3 Initial costs 2,580 Prob Scenario 1 25% 2,578 2,578 2,578 Scenario 2 60% 1,755 1,755 1,755 Scenario 3 15% -781 -781 -781
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