Investment Timing Option: Decision-Tree Analysis The Karns o: Company is deciding whether to dnil for oil on a tract of land that the company owns. The company estimates the project would cost $12 million today. Karns estimates that, once dnlled, the oil will generate positive net cash flows of 56 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 oil, Karns estimates that if it wats 2 years then the project would cost $13 million. Moreover, if it waits 2 years, then there is a 90% chance that the net cash flows would be $6.3 mullion a year for 4 years and a 10% chance that they would be 53.3 milion a year for 4 years. Assume all cash flows are discounted at B\%. a. If the company chooses to dell today, what is the project's net present value? Do not round intermediate calculations. Enter your answer in mifions. For example, an answer of $1.23 milion should be entered as 1.29 , not 1,2.20,000. Round your answer to two decmal places. 1. million b. Using decision tree analysis, does it make sense to wait 2 vears before deciding whether to dnil