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Assumptions 1. The decision to invest in the Mark II must be made after three years, in 1985. 2. The Mark II has an investment requirement of $945 million, which is taken as fixed. 3.Forecasted cash inflows of the Mark II have a present value in 1985 of $852 million and $493 million (852 / 1.23. 493) in 1982. 4. The future value of the Mark II cash flows is highly uncertain. This value evolves as a stock price does with a standard deviation of 44% per year. 5. The annual interest rate is 8% Interpretation The opportunity to invest in the Mark II is a three-year call option on an asset worth $493 million with an exercise price of $945 million. How does the value of the option to invest in the Mark II in 1982 change it a. The investment required for the Mark II is $845 million (vs. $945 million)? (Do not round Intermediate calculations. Round your answer to 2 decimal places.) Option value b. The pretent value of the Mark II in 1982's $545 million (Vs. $493 million)? (Do not round Intermediate calculations, Round your answer to 2 decimal places.) Option value