What is the value of the option to wait

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Reference no: EM131960880

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 initial cost of $3,250 and will receive cash inflows of $1,950 a year for 2 years. If you wait one year to start the project, the initial cost will rise to $3,470 and the cash flows will increase to $2,325 a year for 2 years. What is the value of the option to wait? (Do not round intermediate calculations.)

Reference no: EM131960880

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