Peet Properties is considering spending $6.2 million today (t = 0) to build a factory. The after-tax cash flows the factory generates will depend on whether the state imposes a new property tax. There is a 50% chance that the tax will pass, in which case the factory will produce after-tax cash flows of $1,000,000 at the end of each of the next 5 years and the NPV is -$2, 595, 224. There is a 50% chance that the tax will not pass, in which case the factory will project after-tax cash flows of $2,000,000 for the next 5 years and the NPV is $1,009, 552. The project has a WACC of 12%. The following summarizes the information: If the factory is unsuccessful, the firm will have the option to abandon the project 1 year from now if the tax passes. If the factory project is abandoned, the property can be sold in one year for five million dollars. Once the project is abandoned, the company would no longer receive any cash inflows from it. What is the value of his abandonment option? a. $429, 755 b. -$745, 455 c. $1, 322, 612 d. -$1, 355, 960 e. $876, 183