4. Recall our real estate developer who owns a parcel of undeveloped land and has two years to develop the land. His options, as before, are to build either a 9-unit or 6-unit condominium. As before, the per-unit condo price process is: Year 2 P2(u | u) P (ud) = 120 ear 1 P1 (u) = 1/3 0.2 Pa (d/u) = 0.8 A(d)=90 PI (d)-2/3 (du)=135 po(u l d) = 0.4 A(dd) 105 Per-unit construction cost today (date 0) for a 9-unit condo is 90. It increases by 10 eash year. Per-unit construction cost today (date 0) for a 6-unit condo is so It increases by 5 each year. Revenues and costs are incurred at the time of construction, which is assumed to be instantaneous. The price at which the condo is sold in this problem, however, is the average of the condo pie last year and today's price. The cost of capital is 10%. Determine the value (u)or this project with the embedded delay option. (Do N calculate the entire value event tree!) Be clear on how you arrive at gour answer 4. Recall our real estate developer who owns a parcel of undeveloped land and has two years to develop the land. His options, as before, are to build either a 9-unit or 6-unit condominium. As before, the per-unit condo price process is: Year 2 P2(u | u) P (ud) = 120 ear 1 P1 (u) = 1/3 0.2 Pa (d/u) = 0.8 A(d)=90 PI (d)-2/3 (du)=135 po(u l d) = 0.4 A(dd) 105 Per-unit construction cost today (date 0) for a 9-unit condo is 90. It increases by 10 eash year. Per-unit construction cost today (date 0) for a 6-unit condo is so It increases by 5 each year. Revenues and costs are incurred at the time of construction, which is assumed to be instantaneous. The price at which the condo is sold in this problem, however, is the average of the condo pie last year and today's price. The cost of capital is 10%. Determine the value (u)or this project with the embedded delay option. (Do N calculate the entire value event tree!) Be clear on how you arrive at gour