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Business, 05.03.2021 01:00 kinziemadison12

A project has expected cash flows with a present value of $75 million. The annual standard deviation of the project's returns is 35%. The company can delay the start of the project by 1 year to find out more about the demand for the product. If the company decides to go ahead with the project after 1 year, the company needs to invest $50 million.

The risk-free rate is 5% (continuously compounded).

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