3. An investor is considering a project of owning a silver mine with reserves of 80,000 troy ounces for one year. Taking the project allows him to extract the silver at the end of year at an extraction cost $20 per troy ounce. The risk-free interest rate is 2%. The one-year forward price of silver is $18 per troy ounce. The silver price after 1 year is predicted to be $24 per troy ounce if the demand is high and $15 if the demand is low. The investor will know the market demand before he starts the extraction Find the value of this one-year ownership of the silver mine if (a) the investor is committed to the extraction once he accepts the project. (b) the investor is free to decide whether to extract the silver