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Companies often ceme acress projects that have positive NPV opportunities in which the compaty dces not invest. Companies mist eralwate the value of the qption

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Companies often ceme acress projects that have positive NPV opportunities in which the compaty dces not invest. Companies mist eralwate the value of the qption to invest in a now eroject that would potentialy contribute to the growth of the firm. These options are referred to as gremti egeder. Eeinny Ca, is consideneg a threv-vear project that wil nequire an initial lavestment of 135,000 . It has estimated that the ansual cash. fews for the uroject under egopd condeiges wil be 460,000 and 17,000 under bod conditions. The frm beileves that chere is a 60 s. ehance ef pood conditiont and a 40 he chacice of hed conditions. If then firm in uning a weighted average cont of capkal of 13%4, the expected cet present value (Rey) of the presect is (Nate Da not reines interinediate coloulatinne and rauna yeur answer to the nearest dollar) inveatmntta in the tiroted Hurne cen grinth evout is nume

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