4. You are trying to decide whether to make an investment of $495 million in a new technology to produce Everlasting Gobstoppers right now or a year later. There is no other delay option over a year). There is a 58% chance that the market for these candies will produce profits of $102 million annually, an 18% chance the market will produce profits of $52 million, and a 24% chance that there will be no profits. The size of the market will become clear one year from now. Currently, the cost of capital of the project is 12% per year. There is a 20% chance that the cost of capital will drop to 8% in a year and stay at that level forever, and an 80% chance that it will stay at 12% forever. Movements in the cost of capital are unrelated to the size of the candy market. a. Construct the decision tree that the manager in Everlasting Gobstoppers makes the investment decision either today or a year later. b. Compute the NPV of the investment if you make the investment decision now. c. Compute the NPV of the investment if you wait a year to make the investment decision. d. Which decision does the manager choose? 4. You are trying to decide whether to make an investment of $495 million in a new technology to produce Everlasting Gobstoppers right now or a year later. There is no other delay option over a year). There is a 58% chance that the market for these candies will produce profits of $102 million annually, an 18% chance the market will produce profits of $52 million, and a 24% chance that there will be no profits. The size of the market will become clear one year from now. Currently, the cost of capital of the project is 12% per year. There is a 20% chance that the cost of capital will drop to 8% in a year and stay at that level forever, and an 80% chance that it will stay at 12% forever. Movements in the cost of capital are unrelated to the size of the candy market. a. Construct the decision tree that the manager in Everlasting Gobstoppers makes the investment decision either today or a year later. b. Compute the NPV of the investment if you make the investment decision now. c. Compute the NPV of the investment if you wait a year to make the investment decision. d. Which decision does the manager choose