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 $4,000 and will receive cash inflows of $2,800 a year for 2 years. If you wait one year to start the project, the initial cost will rise to $4,220 and the cash flows will increase to $3,157 a year for 2 years. What is the value of the option to wait? (Do not round intermediate calculations.)

$297.90

$2,556.92

$628.93

$408.00

$484.42

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