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will upvote for correct answers. thanks! Assumptions 1. The decivion to invest in the Mark. If must be made after three yeaps, in 19g5. 2.
will upvote for correct answers. thanks!
Assumptions 1. The decivion to invest in the Mark. If must be made after three yeaps, in 19g5. 2. The Plark il has an lavestaent requirement of 5990 million, which is taken as fixed: 3. Forecasted rash inflows of the park 11 have a prestrit value in 1985 of 9897 willion and 5519 anil1 ion (897/1.2}=519} in 1982 . t. The future value of the Wark II cash flow is highly uncectain. This value evolves as a stock price does with a standard deylation of azs per year. 5. The anneal intenest rate is 9K. How does the value of the option to investin the Mark il in 1982 change if: o. The investment required for the Markill is $890 million (vs. $990 million)? (Do not round intermediote calculations. Round your answer to 2 decimal places.) b. The present value of the Mark II in 1982 is $590 million (vs. $519 million)? (Do not round intermediate caleulations. Round your answer to 2 decimal places.) c. The standard deviation of the Markilis present value is only 27% (vs.42ey)? (Do not round intermediate caleulations. Round your answer to 2 decimal places.) Step by Step Solution
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