Final Exam

The difference between the NPV as calculated in part (a) and the revised NPV is equal to the option value of abandonment, Opt. M = NPV + Opt. $699,334.42 = $608,425.33 + Opt. $90,909.09 = Opt. The option value of abandonment is $90,909.09. 8.13 a. Apply the 10-year annuity formula, discounted at 20 percent to calculate the NPV of the ................
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