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No abadonment: Prob 0 1 2 3 0.6 $ (100,000) $ 90,000 $ 90,000 $ 90,000 0.4 $ (100,000) $ (50,000) $ (50,000) $ (50,000)
| No abadonment: | |||||
| Prob | 0 | 1 | 2 | 3 | |
| 0.6 | $ (100,000) | $ 90,000 | $ 90,000 | $ 90,000 | |
| 0.4 | $ (100,000) | $ (50,000) | $ (50,000) | $ (50,000) | |
| Abandonment: | |||||
| Prob | 0 | 1 | 2 | 3 | |
| 0.6 | $ (100,000) | $ 90,000 | $ 90,000 | $ 90,000 | |
| 0.4 | $ (100,000) | $ (50,000) | |||
WACC is 10%. What is the expected NPV if the firm can abandon the project?
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Essentials Of Investments
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
6th Edition
0073226386, 978-0073226385
