Question
A project costs $300 and has future cash flows of $80 per year forever. If we wait one year, the project will costs $440 because
A project costs $300 and has future cash flows of $80 per year forever. If we wait one year, the project will costs $440 because of inflation, but the cash flow will be $93 per year forever.
A. If these are the two options and our WACC is 18%, what is the value of the option to wait?
B. Should we wait or take the project now?
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Cases In Healthcare Finance
Authors: Louis C. Gapenski
3rd Edition
1567932444, 9781567932447
