Please assist with this questions

premium Oil, Inc. can pay $100,000 for the right to pump oil on a plot of land during the next three years. A well has already been drilled and all other necessary facilities are in place. The land has known results of 60,000 barrels. Premium Oil wishes to know the market value of Operation. The firm's Weighted Average Cost of Capital (WACC) is 8% and the marginal cost of pumping the oil from this site (including all costs) is $8 per barrel. Both of these costs are expected to remain unchanged over the three-year period. The current price of oil is $10 per barrel. Company economists have estimated the following: 1 ) Oil will increase in price by 10% per year with a probability of 40% (Scenario One) OR decrease in price by 12% per year with a probability of 60% (Scenario Two) during each of the next three years. 2) Premium Oil, Inc. can pump a maximum of 20,000 barrels per year at the site. As Financial Analysts for Premium Oil, Inc., you and your group members have been asked to provide a "real option" analysis of this project. Premium Oil's Executive Committee is seeking answers to the following questions. 1) Using Exhibit 4.2 on page 96 as a guide, draw a "decision tree" diagram showing the two possible scenarios that may occur at this drilling site over the upcoming three years.2) Calculate the Present value (PV) of each branch of the decision tree. 3) Using the probability values provided by Premium Oil's economists for each scenario, calculate the expected present value of the cash flows generated by this project. Again, you may wish to use Exhibit 4.2 on page 96 of the textbook as a guide. (Hint: As in Exhibit 4.2, note that a branch of the decision tree having a negative present value can be assigned a value of $0 in this "expected cash flow" calculation. Real option analysis would allow Premium Oil's management to exclude that scenario from further consideration.) a. What is the "Net Present Value" (NPV) of this project, given that the pumping rights will cost Premium Oil $100,000 at t = 0? 4) Based upon your analysis, would you recommend that Premium Oil, Inc. proceed with this project? Why or why not