Fethe's Funny Hats is considering selting trademarked, orenge-haired curly wigs for University of Tennessee football games. The purchase cost for a 2-year franchise to seil the nigs is $20,000. It demand is good ( 40% probability), then the net cash flows will be $25,000 per vear for 2 years, If demand is bod ( 60% probabilty), then the net cash flows wil be $5,000 per year for 2 years. Fethe's cost of capital is 10%. a. What is the expected NPV of the project? Round Ybur answer to the nearest doliar. b. If Fethe makes the investment todoy, then it will have the option to renew the franchise fee for 2 more years at the end of Vear 2 for an additionat payment of 120,000 . In this case, the coth flows that occurred in Years 1 and 2 will be repeated (so if demand has good in Years 1 and 2 , it wil continue to be good in Years 3 and 4 ). Use the black-5choles model to. estimate the value of the optioe. Assume the variance of the projecrs rate of return is 0.3634 and that the nak-free rate is 7 . Do not round intermediate calculabions. Aound your. antwers to the nearrat dollar. Use camputer softeare packeges, such as Minitab or Excel, to solve this problem Value of the orowh option: s volue of the entire project s