March/June 2020 Q1 real option

This topic has 1 reply, 2 voices, and was last updated 5 years ago by John Moffat.

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August 17, 2020 at 7:25 am #580835
lilygao
Member
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Dear John Moffat,

I am unable to figure out how Assets value was calculated for Honua Co offer.

Asset value Pa=16,959,000+19,488,000?

Could you please give me a guide?

Much appreciated!
Lily
August 17, 2020 at 9:03 am #580859
John Moffat
Keymaster
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Because they will be buying the project at the start of the third year, the two figures are the PV of the flows at time 3 and time 4 as calculated in the first workings in the appendix.
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