100d ( 40 s probability), then the set cash fows will be $25,000 per year for 2 years. If demand is bad (60\% probabiliky), then the net cosh flows wil be $5,000 per year for 2 years, Fethe's cout of capital is 16: Do not round intermediate calculations. 3. What is the expected Nov of the project? Negative value, if any, should be indicated by a misis sign. Round your answer to the nearest doliar. s b. If Fethe makes the investment today, then it wal have the option to renew the franchish fee for 2 more years at the esd of Year 2 for an addibional poyment of 520,000 . In this case, the caut flows that occurred in Years 1 and 2 wil be repegted (so if demand was good in Yean 1 and 2 , it wil conthoe to be good in Years 3 and 4 ). Write out the decivion tere. Note: The franchise fee payment at the end of Year 2 is known, so it should be discounted ot the risk-free nate, which is 7%. Select the correct decision tree. the end of Year 2 is knewn, so it sheuld be discounted at the risk-free rate, which is 7%. select the correct decision tree. D The cerrect praph is rour answer to the nearest doliat: 5