Question: You are considering a project which has been assigned a discount rate of 9 percent. If you start the project today, you will incur an

You are considering a project which has been assigned a discount rate of 9 percent. If you start the project today, you will incur an initial cost of $4,500 and will receive cash inflows of $3,300 a year for 2 years. If you wait one year to start the project, the initial cost will rise to $4,720 and the cash flows will increase to $3,657 a year for 2 years. What is the value of the option to wait? (Do not round intermediate calculations.)

$628.93

$408.00

$515.76

$3,284.69

$266.56

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