Refer to Narrative 1 What is the value of the option to expand? $88,294,209$61,842,325$75,632,149$41,963,426 Refer to Narrative 1 What is the NPV of project with option to expand? $50,000,000$10,478,625$11,842,325$16,456,214 Toyota is considering introducing a new SUV to the U.S. market. The SUV will initially be introduced only in the metropolitan areas of the U.S. and the cost of this "limited introduction" is $750 million. A financial analysis of the cash flows from this investment suggests that the present value of the cash flows from this investment to Toyota will be only $700 million. If the initial introduction works out well, Toyota could go ahead with a full-scale introduction to the entire market with an additional investment of $2 billion any time over the next 4 years. While the current expectation is that the cash flows from having this investment is only $1 billion, there is considerable uncertainty about the potential for the SUV, leading to significant variance in this estimate. The standard deviation of the project is approximately 30%. The risk-free rate is 2%. What is the NPV of the limited introduction? - \$50 million \$35 million $50 million - \$25 million