Assume Fisher & Paykel Healthcare is thinking of expanding. If the company invests today, the expansion will generate $10 million in FCF at the end of the year, and will have a continuation value of either $150 million (if the economy improves) or $50 million (if the economy does not improve). If the company waits until next year to invest, it will lose the opportunity to make $10 million in FCF, but it will know the continuation value of the investment in the following year (that is, in a year from now, you will know what the investment continuation value will be in the following year). Suppose the risk- free rate is 5%, and the risk-neutral probability that the economy improves is 45%. Assume the cost of expanding is the same this year or next year. a) If the cost of expanding is $80 million, should Fisher & Paykel do so today, or wait until next year to decide? (2 marks) Click here to enter text. b) At what cost of expanding would there be no difference between expanding now and waiting? (1 mark) Click here to enter text. c) To what profitability index does this correspond? (1 mark) Click here to enter text. d) Aside from the current NPV of the investment, what other factors affect the value of an investment and the decision to wait? (Identify at least two factors and clearly explain how they can affect the decision of whether to delay the investment). (2 marks) Click here to enter text