Question
You are considering a project that offers up the following possible payout with an opportunity cost of 20%. Time 0 1 2 Base Case -$60,000
You are considering a project that offers up the following possible payout with an opportunity cost of 20%.
Time 0 1 2
Base Case -$60,000 10,000 10,000
At the end of year two, you know there is a 10% possibility you will buy out your competitor which has the potential to create opportunities that are worth $1009463 at that time.
How much potential value is created or lost by taking on this project (i.e. what is the NPV)?
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Beyond Greed And Fear Understanding Behavioral Finance And The Psychology Of Investing
Authors: Hersh Shefrin
1st Edition
0195161211, 978-0195161212
