o (Real options and capital budgeting) You have come up with a great idea for a Tex-Mex-Thai fusion restaurant Atter doing a financial analysis of this entute you estimate that the intal outlay will be $56 million You also estimate that there is a 50 percent chance that this new restaurant will be well received and will produce annual cash flow of $20.00 per year forever (a perpetuity), while there is a 50 percent chance of it producing a cash flow of only $200.000 per year forever (a perpetuty i at isoft moved well a. What is the NPV of the restaurant if the required rate of rotum you use to discount the project cash flows a 12 percent? b. What are the real options that this analysis may be ignoring? c. Explain why the project may be worthwhile even though you have just estimated that its NPV is negative? a. Assume the required rate of return you use to discount the project cash flows is 125 What is the NPV of the restaurant if things go well? 5 (Round to the nearest dollar) What is the NPV of the restaurant things go poorly? (Round to the nearest dollar) If there 50% chance that the new restaurant will be well ived and 50% chance with theived well wie NPV ofan Enter your answer in each of the answer boxes Ads Type here to search