Question

Geek Is Us, Inc. may invest $8 million in an Alien Spectograph project. Annual costs and revenues, starting next year, are forecasted to be $3 million and $2 million growing at 0.0% and 4.0%, respectively. If the opportunity cost of capital is 6.0% and σ = 0.0, what is the investment trigger price?
A) $20.95 million
B) $30.95 million
C) $40.95 million
D) $50.95 million

Answer

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