QUESTION 15 You are considering waiting for a project that will begin next year. The project has an upfront cost of $100,000 (at t=1). Today, you know that there is a 50% chance that the cash inflows starting at t-2 will be $43,500 a year for four years and a 50% chance the cash inflows will be $20,000 a year for four years. You will know the cashflow stream with certainty at t=1 at which time you decide to make the initial Investment. You will only make the investment if it makes sense to proceed with the project. What is the expected NPV of this project (with the waiting option) today? Assume WACC is 10%. $25,000 56,000 $17.222 $20,000 QUESTION 16 When projects are mutually exclusive you should use: Neither NPV IRR Either NPV or IRR