1. A young graduate looks to save money to buy a house 8.00 years from today. He is somewhat conservative and will invest his money in a bond fund that pays 4.00% annually. The graduate invests $9,278.00 today. How much will his account be worth in 8.00 years?
2. The option to abandon a project inexpensively has particular value when:
a) the project looks to have a very large NPV.
b) has a low degree of operating leverage.
c) you can be confident about future profits.
d) the equipment has a ready second-hand value.