Question: You are thinking a project which has been assigned a discount rate of eight percent. If you start the project today, you will incur an initial cost of 480 dollar and will receive cash inflows of $350 a year for three years. If you wait one year to start the project, the initial cost will rise to 520 dollar and the cash flows will increase to $385 a year for 3 years. Determine the value of the option to wait?
[A] $15.23
[B] $17.08
[C] $18.67
[D] $20.20
[E] $50.20