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Chrustuba Inc. is evaluating a new project with an after-tax cost of $8.2 million at t=0. There is a 50% chance that the project would

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Chrustuba Inc. is evaluating a new project with an after-tax cost of $8.2 million at t=0. There is a 50% chance that the project would be highly successful and generate anntal after-tax cash flows of $6.2 million during Years 1, 2, and 3. However, there is a 50% chance that it would be less successful and would generate annual after-tax cash flows of only $1 million for each of the 3 years. If the project is highly successful, it would open the door for another after-tax investment of $11 million at the end of Year 2, and this new investment could be sold for \$22 million after taxes at the end of Year 3 . Assaming a WACC of 8.0%, what is the project's expected NPV (in thousands) after taking into account this growth option? Do not round intermediate calculations. a. $5,954 b. $10,189 c. $5,702 d. $5,094 e. 36,158 Chrustuba Inc. is evaluating a new project with an after-tax cost of $8.2 million at t=0. There is a 50% chance that the project would be highly successful and generate anntal after-tax cash flows of $6.2 million during Years 1, 2, and 3. However, there is a 50% chance that it would be less successful and would generate annual after-tax cash flows of only $1 million for each of the 3 years. If the project is highly successful, it would open the door for another after-tax investment of $11 million at the end of Year 2, and this new investment could be sold for \$22 million after taxes at the end of Year 3 . Assaming a WACC of 8.0%, what is the project's expected NPV (in thousands) after taking into account this growth option? Do not round intermediate calculations. a. $5,954 b. $10,189 c. $5,702 d. $5,094 e. 36,158

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