9.This question is a variant of the Sport Hotel example that was presented in class, in the class notes, and in the Real Option chapter. Suppose that in the example, the first year expenditures that include the purchase of plans and permits is not $1 million but instead $1.6million. All other aspects of the problem are the same as originally presented. Incorporating these new values, the probability that the city is awarded the franchise at 50%, and the real option, what is the new NPV of the project?

$_________million

Place your answer in millions of dollars using at least three decimal places. For example, the answer of nine hundred seventy five thousand would be entered as 0.975 and not as 975000.

10.Consider the Sport Hotel example that was introduced and solved in the lesson, the class notes, and in the text chapter on real options. Now consider this one change to that original problem: if the franchise is accepted the value of the hotel is not $8 million but instead $7.75. Everything else, all revenues and expenses, is the same as shown in the original example. Incorporating the real option, what probability of the franchise being granted would build a zero NPV for the investment?

__________%

Place your answer in percentage form with at least 2 decimal places. For example, and answer of fifteen point four three percent would be entered 15.43.