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Carlson Inc. is evaluating a project in India that would require a $ 5 . 5 million after - tax investment today ( t =
Carlson Inc. is evaluating a project in India that would require a $ million aftertax investment today t The aftertax cash flows would depend on whether India imposes a new property tax. There is a chance that the tax will pass, in which case the project will produce aftertax cash flows of $ at the end of each of the next years. If the tax doesn't pass, the aftertax cash flows will be $ for years. The project has a WACC of The firm would have the option to abandon the project year from now, and if it is abandoned, the firm would receive the expected $ million cash flow at t and would also sell the property and receive $ million after taxes at t If the project is abandoned, the company would receive no further cash inflows from it What is the value in thousands of this abandonment option? Do not round intermediate calculations.
a $
b $
c $
d $
e $
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