Aggarwal Enterprises is considering a new project that has an initial cash outflow of $1,000,000, and the CFO set up the following simple decision tree to show its three most likely scenarios. The firm could arrange with its work force and suppliers to cease operations at the end of Year 1 should it choose to do so, but to obtain this abandonment option, it would have to make a payment to those parties. How much is the option to abandon worth (in thousands of dollars) to the firm? Do not round the intermediate calculations. WACC = 11.596 t=0 Dollars in Thousands NPV this t=1 t=2 t=3 State $800.0 $800.0 $800.0 $938.1 Probx NPV $187.6 Prob = 2096 Prob 6096 -$1,000 $520.0 $520.0 $520.0 $259.8 $155.9 Prob = 2096 -$170.0 -$170.0 -$170.0 -$1,411.8 -$282.4 Exp. NPV= $61.1 Aggarwal Enterprises is considering a new project that has an initial cash outflow of $1,000,000, and the CFO set up the following simple decision tree to show its three most likely scenarios. The firm could arrange with its work force and suppliers to cease operations at the end of Year 1 should it choose to do so, but to obtain this abandonment option, it would have to make a payment to those parties. How much is the option to abandon worth (in thousands of dollars) to the firm? Do not round the intermediate calculations. WACC = 11.596 t=0 Dollars in Thousands NPV this t=1 t=2 t=3 State $800.0 $800.0 $800.0 $938.1 Probx NPV $187.6 Prob = 2096 Prob 6096 -$1,000 $520.0 $520.0 $520.0 $259.8 $155.9 Prob = 2096 -$170.0 -$170.0 -$170.0 -$1,411.8 -$282.4 Exp. NPV= $6