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% possiblity you will buy out your competitor which has the potential to create opportunities that are worth $1,028,231 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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Internal Auditing Assurance And Consulting Services
Authors: Kurt F. Reding, Paul J. Sobel, Urton L. Anderson, Michael J. Head, Sridhar Ramamoorti, Mark Salamasick, Contributing Writer, Cris Ridd, Richard Tuschman
1st Edition
0894136100, 978-0894136108
