c) Sporting Cycles has come up with a new road bike prototype and is ready to go ahead with pilot production and test marketing. The pilot production and test marketing phase will last for one year and cost 600,000 to be paid today. The management team believes that there is a 40% chance that the test marketing will be successful and that there will be sufficient demand for the new road bike. If the test-marketing phase is successful, then Sporting will invest 2.5 million in year one to build a plant that will generate expected annual free cash flows of 350,000 in perpetuity beginning in year two. If the test marketing is not successful. Sporting can still go ahead and build the new plant, but the expected annual free cash flows would be only 150,000 in perpetuity beginning in year two. Sporting's cost of capital is 10%. Suppose that Sporting has the option to sell the prototype road bike to a competitor in year one for 500,000. This option is available regardless of whether the piloting stage succeeds or not. What is the NPV of the Road Bike Project in this case? What is the value of this option