RA. Consider the information in Exercise 7.7. Additionally assume that the cost of capital is 10%. Ignore
Question:
RA.
Consider the information in Exercise 7.7. Additionally assume that the cost of capital is 10%.
Ignore taxes.
Required:
1. Use RA to decide whether to invest now or wait a year to decide whether to invest.
2. How much would you be willing to pay for the option to defer the investment?
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