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Hello,
I have one question relating to real options. In the case of Digunder (exam Dec07), the value of the option was added to the NPV of the project without the option to delay in order to calculate the total value of the project.
When I practiced the Nente question a) iii), I was surprised that only the value of the option ($609k) was considered in the total value of the follow-on product, but not the value of the project without option (405k) of the project.
Why is this the case?
Thanks a lot in advance.
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