Growth Option: Decislon-Tree Analysis Fethe's Funny Hats is considering seling trademarked, orange-haired curfy wigs for University of Tennessee football games. The purchase cost for a 2-year franchise to sell the wigs is $20,000. If demand is good (a0\% probability), then the net cash flows will be $27,000 per year for 2 years. If demand is bad ( 60% probability), then the net cash fows will be $3,000 per year for 2 years. Fethe's cost of capital is 11%. Do fot round intermediate calculations. a. What is the expected NpV of the project? Negative value, If any, should be indicated by a minus sign. Round your answer to the nearest dollar: . b. If Fethe makes the imvestment 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 $20,000. In this case, the cash fows that occurred in Years 1 and 2 will be repeated (so if demand was good in Years 1 and 2 , it will continue to be good in Years 3 and 4). Write out the decision tree. Note: The franchise fee payment at the end of Year 2 is known, so it should be discounted at the risk-free rate, Which is 4%. Select the correct decision tree. Select the correct decision tree. C D The correct graph is Use decision-tree analysis to calcuiate the expected NPY of this project, including the option to continue for an additional 2 years. Negative vaiues; If any, should be indicated by a minus sign, Round your answer to the nearest dollar. 5 Check My Work ( 5 remaining)