Resolve the last problem assuming Work Station Inc. has an abandonment option at the end of the
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Resolve the last problem assuming Work Station Inc. has an abandonment option at the end of the first year under which it will recover $5 million of the initial investment in year 2. What is the value of the ability to abandon the project? How does your overall recommendation change?
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The ability to abandon the project changes the decision tree as follows Paths 3 and 4 condense into ...View the full answer
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