Excel Online Structured Activity: Investment Timing option All American Telephones Inc. is considering the production of a new cell phone. The project will require an investment of $16 million. If the phone is well recelved, the project will produce cash flows of $10 million a year for 3 years, but if the market does not like the product, the cash flows will be only $1 million per year. There is a 50% probability of both good and bad market conditions. All American can delay the project a year while it conducts a test to determine whether demand will be strong or weak. The delay will not affect the dollar amounts involved for the project's investment or its cash flows-only their timing. Because of the anticipated shifts in technology, the 1-year delay means that cash flows will continue only 2 years after the initial investment is made. All American's WACC is 11%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. Open spreadsheet What action do you fecommend? Do not round intermediate calculations. Round your answers to the nearest dollar. Use a minus sign to enter negative values, if ary. NPV without waiting: 5 NPY of watting 1 year: 5 You recommend Investment Timing Option \begin{tabular}{|c|c|} \hline A & B \\ \hline \multicolumn{2}{|l|}{ Investment Timing Option } \\ \hline WACC & 11.00 \\ \hline \multicolumn{2}{|l|}{ Project Done Today } \\ \hline Investment cost & $16,000.0 \\ \hline CFs if product well received & $10,000,00 \\ \hline CFs if product poorly received & $1,000,000 \\ \hline Probability of good market conditions & 50.00 \\ \hline Probability of bad market conditions & 50.00 \\ \hline Project life (in years) & \\ \hline \end{tabular} Project life (in years) Wait 1 Year To Do Project Investment cost CFs if product well received CFs if product poorly received Probability of good market conditions Probability of bad market conditions Project life (in years) $16,000,000 $10,000,000 $1,000,000 50,00% 50,00% 2 NPV of Doing Projoct Today Good Market Conditions: \begin{tabular}{|l|l|l|l|l|} \hline 0 & 3 \\ \hline \end{tabular} NPV of Doing Project Today Good Market Conditions: Probability Investment cost Cash inflows Net present value, good market Bad Market Conditions Probability Investment cost Cash inflows Net present value, bad market Expected NPV of doing project today NPV of Waiting 1 Year to Do Project Good Market Conditions Probability Investment cost \begin{tabular}{|l|l} & 0 \\ 50.00% & \\ & $16.000.000 \end{tabular} Sheet1 \begin{tabular}{|c|c|c|c|c|} \hline \multirow{2}{*}{\multicolumn{5}{|c|}{ Good Market Conditions: }} \\ \hline & & & & \\ \hline Probability & 50.00% & & & \\ \hline Investment cost & & $16,000,000 & & \\ \hline Cash inflows & & & $10,000,000 & $10,000,000 \\ \hline Net present value, good market & & \#N/A & & \\ \hline Bad Market Conditions: & & & & \\ \hline Probability & 50.00% & & & \\ \hline Investment cost & & $16,000,000 & & \\ \hline Cash inflows & & & $1,000,000 & $1,000,000 \\ \hline Net present value, bad market & & r \#N/A & & \\ \hline Expected NPV today of waiting 1 year & & F \#N/A & & \\ \hline What action is recommended? & & F HNIA & & \\ \hline \end{tabular}