High Roller Properties is considering building a new casino at a cost of $10 million at t=0. The after-tax cash flows the casino generates will depend on whether the state imposes a new income tax, and there is a 50 -50 chance the tax will pass. If it passes, after-tax cash flows will be $1.875 million per year for the next 5 years. If it doesn't pass, the after-tax cash flows will be $3.75 million per year for the next 5 years. The project's WACC is 11.08 . If the tax is passed, the firm will have the option to abandon the project 1 year from now, in which case the property could be sold to net $6.5 million after tax at t=1. What is the value (in thousands) of this abandonment option? a. $277 b. $202 c. $224 d. $249 e. $308 High Roller Properties is considering building a new casino at a cost of $10 million at t=0. The after-tax cash flows the casino generates will depend on whether the state imposes a new income tax, and there is a 50 -50 chance the tax will pass. If it passes, after-tax cash flows will be $1.875 million per year for the next 5 years. If it doesn't pass, the after-tax cash flows will be $3.75 million per year for the next 5 years. The project's WACC is 11.08 . If the tax is passed, the firm will have the option to abandon the project 1 year from now, in which case the property could be sold to net $6.5 million after tax at t=1. What is the value (in thousands) of this abandonment option? a. $277 b. $202 c. $224 d. $249 e. $308