I need step by step calculator computations for Parts I,II,& III (Expected NPV,Standard deviation, CV,& the value of the option). I will rate. Computations need to be in this format:

Part I: Project without the Growth Option:

NPV (Good): You can use row 2 of the calculator with the following inputs:

CF0 = -3000; C01 = 1500; F01 = 3; I = 12; CPT NPV; NPV = $603

Note: If you don't feel comfortable using the frequency key, you can enter the cash flows as follows:

CF0 = -3000; C01 = 1500; F01 = 1; C02 = 1500; F02 = 1; C03 = 1500; F03 =1

You follow the same procedure for the bad outcome and you get NPV = -$358

Expected NPV:

(.5*603) + (.5*(-358)) = $122

Standard Deviation:

SQRT[..5(603-122)^2 + .5(-358-122)^2] = $480

CV:

480/122 = 3.93

Part II: Project with the Option

The calculations are identical to part I. When you follow the calculations noted above, you get the following numbers:

Expected NPV = $1,503

Std. Dev. = $1,861

CV = 1.24

Part III: Value of the Option

Value of the option is the expected NPV with the option - expected NPV without the option. In this case:

Value of the option = $1,503 - $122 = $1,381

apter 13 Real Options and Other Topics in Capital Budgeting Analysis of a Timing Option (dollars in thousands) PaRL Project without the Timing Opi Outcome Bad art L Project Without the Timing Option Cash Flow at End of Period Prob.0 50% 12% -$3,000 $2,000 $450 $2,000$2,000 50% Expected NPV CV / Expected NPV 32.23 Coefficient of Variation Part ll. Delay the Decision Until We Know the Market Conditions NPV@ 12% 339 $0 $170 $170 1.00 Cash Flow at End of Period Outcome Prob 50% 50% $3,000 s0 $2,000 $0 $2,000 S0 $0 Bad Expected NPV Standard Deviation (a) Coefficient of Variation-CV- / Expected NPV 21Part IlIl. Value of the Option Expected NPV with the timing option Expected NPV without the timing option $170 -$58 CASE 1: If the expectert do drnsing option is positive, then Expected NPV without the timing option Value of the Option- imong pike CASE 2: If the expected NPV without the timing option is negative, thern Expected NPV with the timing option $17 23 Value of the Option - Note: If a negative NPV project does not have a timing option, then it would not be undertaken. n these cases, the expected NPV without the timing option is zero. VALUE OF OPTION $170 Note: Under the Delay situation, we must find the NPV as of t 0. If we set the cash flow for t 0 at $O then using a calculator or Excel, we automatically find the NPV att-o. However, if we let CF, -3000, CF-2000, N- 2, and IYR 12, we get an NPV $380 under the Good outcome and an expected NPV of $190. Note, though, that these NPVs are as oft-1, so we must discount them back year at 12% to achieve comparability with the NPV calculated for not delaying the project and arrive at the correct