Part 3 - Real Options BrightFuture Inc. is an alternative energy company that focuses mainly on providing power to homes and businesses using solar eneroy Your company is considering pursuing an ambitious new project, which would entail build s and maintaining a large installation of solar paneis in the dessert in Arizona. The electricity produced by the solar panels could then be used to supply power to the Phoenix and San Diego areas. The project would require an initial investment of $30 million this year, which would go towards getting the necessary permits and helping the government complete its environmental impact review, in addition to acquiring an initial inventory of solar panels. The viability of the project will depend on a number of difficult to predict factors including how fast the price of solar panels declines, whether the government is willing to fast-track the process for getting permits, and how much the demand for energy increases in San Diego and Phoenix over time. Three years from now, some of the sources of uncertainty will be resolved. If the regulatory process and market forces are favorable to you, you'll be able to capitalize on the project's upside and supply power to Phoenix and San Diego. 22. In your first three years, you would generate very little revenue. You will install a small number of solar panels initially which you can use to supply some power to the local area, to generate earnings of $3 million a year in these first three years. If the cost of capital for your project is 15%, what would be the NPV of the project for the first three years? Include the $30 million initial investment, and the $3 million annual earnings in your calculation