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Question 26 4 pts Your firm is considering a project with the following after-tax cash flows (in Smillions) Cases Probability t=0 t-1 t-2 t3 -

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Question 26 4 pts Your firm is considering a project with the following after-tax cash flows (in Smillions) Cases Probability t=0 t-1 t-2 t3 - 4 Best 30% - 17 13 13 13 13 Average 40% - 17 B 8 8 Worst 30% -17 -5 -5 -5 -5 Your firm has an option to abandon the project after 1 year of operation, in which case it can sell the asset and receive $10 millions after taxes in cash at the end of Year 2. The WACC is 11%. Estimate the value of the abandonment option. O $6.11 million $5.94 million O $60 milion LET

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