Assignment:
Rework Problem using the Black-Scholes model to estimate the value of the option: The risk-free rate is 6 percent. (Hint: Assume the variance of the project’s rate of return is 1.11 percent.)
What factors should a company consider when it decides whether to invest in a project today or to wait until more information becomes available?
Provide complete and step by step solution for the question and show calculations and use formulas.