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Question
Use Cox-Ross-Rubenstein to construct a 2-year binomial tree for the evolution of cash flows with a binomial period of 1. Assume the initial cash flow (CF1) is $20 million, σ = 0.45, r = 0.13, g = 0.02, and the project lasts 2 years. What is the value of the project on the up node in year 1?A) $85 million
B) $185 million
C) $285 million
D) $385 million
Answer
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Related questions
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