Chartered Financial Analyst Level 1

Chartered Financial Analyst Level 1

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A new project has a net present value (NPV) of -0.20million.Anadditionalinvestmentof0.20 million. An additional investment of 0.40 million would provide the flexibility to switch to a lower-cost input in the future. If the estimated value of this option is $0.80 million, the total value of the project, including the option, is: