Please show the step by step calculations for PART 3 only:

Chapter 13 Real options and other Topics in Capital Budgeting Analysis of a Flexibi GURE 13.4 Cash Flow at End of Period NPva Part I. Project Without the Flexibility option 12% Prob. Outcome $5,000 $2,500 $2,500 $2,500 $1,005 50% Strong demand 50% $1,500 $1,500 $1,500 -$1,397 $5,000 Weak demand Expected NPV $196 Cash Flow at End of Period NPV@ Part II, Project With the Flexibility option 12%. Prob Outcome $905 $5,100 $2,500 $2,500 $2,500 Strong demand -$5,100 $1,500 $2,250 $2,250 -$366 Switch products 50% Weak demand Expected NPV $270 Part Ill. Value of the Option Expected NPV with the flexibility option $270 -$196 Expected NPV without the flexibility option CASE 1: If the expected NPv without the flexibility option is positive, then Expected NPV Value of the Expected NPV with NA without the flexibility the flexibility option option option CASE 2: If the expected NPV without the flexibility option is negative, then Value of the Expected NPV with $270 the flexibility option option Note: If the expected NPV without the flexibility option is negative, the project would not be undertaken, in which case the project would have no effect value (NPv 0) VALUE OF OPTION $270 What are input flexibility options and output flexibility options? How do flexibility options affect projects' NPVs and ri