Calbraith Co. 4 considering a four-year project that will require an initial investment of $7,000, The bose-case cash flows for this project are projected to be $14,000 per year. The best-case cash flows are projected to be $21,000 per year, and the worst-case cash flows are projected to be - $2,500 per year. The company's analysts have estimated that there is a 50% probablity that the project will generate the buse-case cash flowo. The analysts also think that there is a 25% probability of the project generating the best-case cash flows and a 25% probability of the project generating the worst-cace cash flows. What would be the expected net present value (NPV) of this project if the project's cost of capital is 11% ? Gaibrath now wants to take into account its ability to abandon the project at the end of year 2 if the project ends up generating the warzt-case scenario cash flows. If it decides to abandon the project ot the end of year 2 , the company will receive a one time net cash initlow of s3, 500 (at the end of year 2). The $3,500 the company receives at the end of year 2 is the difference between the cash the company receivec from seiling off the project's assets and the compony's $2,500 cesh outflow from operations. Additionaliy, if it abandons the project, the company will have no cash flows in years 3 and 4 of the project. Using the information in the preceding problem, find the expected wPy of thas project when taking the abundonment option into account. $38,940$31,152$40,498$28,037 What is the value of the option to abandon the project