(Solution) - If you commence a project today you will have initial -(2025 Original AI-Free Solution)

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If you commence a project today, you will have initial costs of $16,000 and annual cash inflows of $9,900 for two years. If you wait until next year to start this project, your initial costs will increase to $17,500 and the annual cash inflow for each of the two years will be $10,500. What is the value of the option to wait if the applicable discount rate is 12 percent?
a. -$512.28
b. -$485.97
c. -$397.46
d. -$245.54