Cold Dudc Manufacturing Inc. Go. is planning to add a new product line to malce iBoolcs. However, Cold Duck Manufacturing Inc. is oorisidering the pomibility of abandoning the project if the demand for the new product is low. In the following decision tree table, (1}, (1) and [3} represent decision pointsI also known as decision nodes or stages. The dollar value to the ght of each decision node represents the net cash flow at that point, and the cash flows shown undert = 3, 4, and 5 represent the cash inows ifthe project is pushed on to completion. If Gold Duck Manufacturing Inc. Do. decides to launch the new line for iBooks at Siege [1}, then itwill spend $so.ooo on the marketing sdey. If the markeb'ng study yields positive resulls, then the rm will spend $3EIIIII,DDD on the prototype. If the prototype works wellr then the rm will spend several millions more at siege (3} to build a production plant. Suppose that as an analyst at Cold Duck Manufach ring Inc. you have to analyze sequential decisions. By sdeying the Following decision treeI you learn which of the following? died: all that apply. El There isa P'S'N: probability ofthe pilot projectyielding good results. U There isa 30% probability that investment in a production plant will yield bad resulls. El There is a 5mm probability ofthe pilot project yielding good results. El 1f the project is canceled after Siege [1}, Cold Duck Manufacturing Inc.'s costs will be $1o,259,ooo. Complete the decision tree table by calculating the net present values [lm] and joint probabilities, as well as products of joint probabilities and NWs for each decision branch. Assume that the weighted average cost of capital (WACCJI is 3% forall decision branches. Hint: Use eithera spreadsheet program's funcb'clis or a nancial calculator for this task. Round the lms to the nearest dollar and remen'lberto enter the minus sign if a value is negab've. note: All cash amounts in the following table are in thousands ofdollars. Step D Step 1 step 2 Step 3 Step 4 Step 5 lat lmrust Prob 2nd Invent Prob and Invest Inow Inow Inow new [$1 Joint raw 1 Joint Prob (so) Prob (H [nausea -$1o.zas (a) $4,?51 $3,233 $2o,oas [:l [:| E] 35% -$3oo iii zone -1o'.boo fifstllsoo $5,345 I'sflaoo'I:m: [Ii-$3" mm st"! [31' e. in. *Dljljlj- "so so: in in in in l:l El El Based on your calculations, you reoomm end that {old Duck Manufacturing Inc