You can invest in a project either now or next year. If it is successful,...
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You can invest in a project either now or next year. If it is successful, you get a perpetual cash flow of $30M that starts the following year, and grows at rate of 2 percent . If it is unsuccessful, you got a perpetual cash flow of S10M that starts the following year and grows at a rate of 2 percent. The project costs $160M and has a discount rate of 12 percent. Both states are equally likely What is the NPV of the project at t+1 if you invest in the bad stato? O $35 OM O S60 OM $76.67M
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