1. Boyd Enterprises is considering developing a new baseball souvenir for use in the new baseball stadium. It is very big, very bright, and very noisy! Boyd will immediately spend $50,000 on a design and test marketing study that will take a year to complete. If the fan focus groups hate it ( 30% probability) Boyd will abandon the project and receive nothing. If they love it ( 70% probability) then in Year 1 Boyd will invest $30,000 in new manufacturing equipment. Sales will begin in Year 2 . If actual fans in the stadium love it ( 80% probability), Boyd will receive cash flows of $40,000 per year for 5 years starting in Year 2 . If fans don't like them ( 20% probability) Boyd will only receive cash flows of $2,000 per year for 5 years. What is the expected NPV of the project? Boyd's WACC is 10%. Hint: Draw a decision tree! *a. $9,068.22 b. $9,975.04 c. $10,972.55 d. $12,069.80 e. $13,276.78