5. Again consider the widget investment problem in Section 1.Verify that with S = ($50), K =...

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5. Again consider the widget investment problem in Section 1.Verify that with S = \($50\), K = \($30\), r = 0.04879, σ = 0, and δ = 0.009569, the perpetual call price is \($30.597\) and exercise optimally occurs when the present value of cash flows is \($152.957\). What happens to the value of the project and the investment trigger when you change S?

Why? What happens to the value of the project and the investment trigger when you increase volatility? Why?

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