Mountain Provisions is considering expansion into Quebec. The potential cash flows are shown below. There is a 20% Probability that the Quebecois Government will not approve the expansion. Find the Expected NPV if the Cost of Capital is 8.0%.

WACC: 8.00%

Year 0 1 2 3 4

CF_A -$1,300 $400 $600 $700 $900

CF_D -$1,300 -$100 -$100 -$100 -$100

If the Quebecois Government does not approve the expansion, how valuable would the option to abandon the project in year two be? There is a 20% Probability that the expansion will not be approved.

Year 0 1 2 3 4

CF_A -$1,300 $400 $600 $70 $900

CF_D -$1,300 -$100 -$100 0 0