Rosita's is considering a project with a discount rate of 9 percent. If the firm starts the project today, it will incur an initial cost of $32,260 and will receive cash inflows of $18,320 a year for 4 years. If the firm waits 1 year to start the project, the initial cost will decrease to $30,500, the cash flows will increase to $18,640 a year for 4 years, and the discount rate will decrease to 8.5 percent. What is the value of the option to wait?

Multiple Choice

• $1,489.20

• $848.29

• $1,471.42

• $1,071.58

• $681.04