Impestment Timing Detiant Dectuign-fice Analvsis 4 years and a 100 dhance that ther would be 12.25mi ion a year for 4 years. Assume all cach fowl are discounted at 10 fos. entered as 1 2, net 1,200,000. Round your answer to two decimal places. malish b. Using decision-tree ahalrsis, does it make sense bo wat 2 years before deciding whether to driir? entered at 1.2, net 1,200,000. Aound your akiwer to two decimel places. mition b. Using decisieh-tree aralysit, does it make sense to wait 2 vears before decidng whether to drat? Investment Timing Option: Decision-Tree Analysis The Karns Oil Company is deciding whether to drill for oil on a tract of land that the company owns. The company estimates the project would cost s9 million today, Karns estimates that, once drilled, the oll will generate positive net cash flows of $4.5 million a year at the end of each of the next 4 years. Although the company is fairly confident about its cash flow forecast, in 2 years it will have more information about the local geology and about the price of oll, Kams estimates that if it waits 2 years then the project would cost $10 million. Moreover, if it waits 2 years, then there is a 90% chance that the net cash flows would be $4.86 million a year for 4 years and a 10% chance that they would be $2.25 million a year for 4 years. Assume all cash flows are discounted at 10%. a. If the company chooses to drill today, what is the project's net present value? A negative value should be entered with a negative sign. Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1,2 , not 1,200,000. Round your answer to two decimal places. million b. Using decision-tree analysis, does it make sense to wait 2 years before deciding whosher to drili