Calculate the price of a 2-year chooser option. The static NPV is $1 000 000. The risk-free rate is 10% per year and the volatility is 30% per year. You plan to revise your decision every year. Do not make assumptions unless stated in the exercise. Use any method and discounting mode (continuous or discrete) that you feel more comfortable with. The alternative options are given below:

Option 1: There is an opportunity to expand by 50% the first year. To undertake this expansion opportunity, it will cost $500 000.

Option 2: The first year, there is an opportunity to contract 50% of your capacity to a competitor and save costs up to $500 000.

Option 3: At the end of the first year, you may abandon the project for $500 000 of salvage value.