A project has a value of $25 million today. If demand turns out to be high, the project will be worth $40 million in 1 year. However, if demand turns out to be low, the project will be worth $17.5 million in 1 year. The project can be abandoned in 1 year for $22 million. The risk-free rate is 8%. (13 points) a) Calculate the value of the abandonment option using the binomial method. b) How would the value of the option change if the project were more volatile? Explain. (No calculations required for this part.) A project has a value of $25 million today. If demand turns out to be high, the project will be worth $40 million in 1 year. However, if demand turns out to be low, the project will be worth $17.5 million in 1 year. The project can be abandoned in 1 year for $22 million. The risk-free rate is 8%. (13 points) a) Calculate the value of the abandonment option using the binomial method. b) How would the value of the option change if the project were more volatile? Explain. (No calculations required for this part.)