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Value of the option to wait-bella bone emporium inc

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Bella's Bone Emporium, Inc. is considering a project with an initial cost today of $10,000. The project has a life of 2 years with cash inflows of $6,500 a year. If Bella were to decide to wait one year to commence this project, the initial cost would increase by 5 percent, and the cash inflows will increase to $7,500 a year. What is the value of the option to wait at a discount rate of 10 percent?

Reference no: EM132705445

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