Fethe's Funny Hats is considering seiling trademarked, orange-haired curly wigs for University of Tennessee footboll games. The purchase cost for a 2 -year franchise seli the wigs is $20,000, If demand is good (40\% probability), then the net cash flows will be 325,000 per year for 2 years. If demand is bad ( 60% probablity), then the net cash flows will be $5,000 per year for 2 years. Fethe's cost of capital is 10%. 3. What is the expected NFY of the project? Round your answer to the nearest dollar. b. If Fethe makes the investment today, then it will have the option to renew the franchise fee for 2 more years at the end of Year 2 for an additional payment of 520,000 . In this case, the cash flows that occurred in Years 1 and 2 will be repested (so if demand was good in Years 1 and 2 it it will continue to be good in Years 3 and 4). Use the Biack-Scholes model to estimate the value of the option. Assume the variance of the project's rate of return is 0.3721 and that the risk-free rate is 7%. Do not round intermediate calculations. Round your answers to the nearest doliar. Use computer software packages, such as Minitab or Excel, to solve this problem. Value of the growth option: 5 Value of the entire projecti 5