Questions 28 to 30 refer to the following information: Philip Airlines is considering the purchase of a turbocharged airplane for its business. If the airline gets off to a good start and demand is high, Philip Airlines calculates it will have a business worth $738,000 by the end of the first year. If things do not work out, it will be worth only $415,000. Philip Airlines estimates that there is a 60% chance that the business will succeed. If the business does not succeed, Philip Airlines can sell the airplane for $500,000 at the end of the first year. The airplane cannot be sold at any other point in time. Assuming the cost of capital is 10% and without considering the abandonment option, the present value of expected future cash flows is: O $415,000 O $608,800 O $738,000 O $553,455