Question: You are considering a project which has been assigned a discount rate of 6 percent. If you start the project today, you will incur an

You are considering a project which has been assigned a discount rate of 6 percent. If you start the project today, you will incur an initial cost of $4,200 and will receive cash inflows of $3,000 a year for 2 years. If you wait one year to start the project, the initial cost will rise to $4,420 and the cash flows will increase to $3,357 a year for 2 years. What is the value of the option to wait?

$434.52

$3,371.21

$611.62

$336.33

$508.12

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