What is the NPV of the project without the option? 1. The project will cost a total
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Question:
What is the NPV of the project without the option?
1. | The project will cost a total of $1,794,585 | |||||
2. | In the best case scenario (54% probability), it will generate $375,000 each year for 10 years. | |||||
3. | However, if the market conditions do no support the project, in the worst case scenario, it will generate $200,000 each year for 10 years. | |||||
4. | If the project needs to be abandoned it can be sold for $1,507,441 after one year. | |||||
5. | The project has a 10.39% WACC. |
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