Consider the project whose cash flows are as follows:

a. Using the state prices, value the project.

b. Suppose that at date 2 the project can be abandoned at no cost. What does this fact do to its value?

c. Suppose that at any time the project can be sold for \($100.\) Show the tree of cash flows and value the project.

A B C E F G H 1 Project cash flows 2 3 169 State prices 4 130 Qui 0.3000 5 91 0.5000 6 -100 7 91 8 70 9 -90