Hart Lumber is considering the purchase of a paper company. which would require an initial investment of $300 million. Hart estimates that the paper company would provide net cash flows of $40 million at the end of each of the next 20 years. The cost of capital for the paper company is 13%. . Should Hart purchase the company? Harts best guess is that cash flows will be $40 million a year. but it realizes that the cash flows are as likely to be $30 million a year as $50 million. One year from now, it will find out whether the cash flows will be $30 million or $50 million. In addition Hart could sell the company at Year 3 for $280 million. Given this additional information, does it make sense to purchase the paper company? Again assume that the cash flows are discounted at 13%. . What is the option value