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Singh Development Co . is deciding whether to proceed with Project x . The after - tax cost would be $ 1 0 million in
Singh Development Co is deciding whether to proceed with Project The aftertax cost would be $ million in Year There is a chance that would be hugely successful
and would generate annual aftertax cash flows of $ million per year during Years and However, there is a chance that would be less successful and would generate
aftertax cash flows of only $ million per year for the years. If Project is hugely successful, it would open the door to another investment, Project which would require an
aftertax outlay of $ million at the end of Year Project would then be sold to another company netting $ million after taxes at the end of Year Singh's WACC is
a If the company does not consider real options, what is Project Xs expected NPV Enter your answers in millions. For example, an answer of $ should be entered
as Negative value, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to three decimal places.
$
million
b What is Xs expected NPV with the growth option? Enter your answers in millions. For example, an answer of $ should be entered as Negative value, if
any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to three decimal places.
$
million
c What is the value of the growth option? Enter your answers in millions. For example, an answer of $ should be entered as Negative value, if any, should
be indicated by a minus sign. Do not round intermediate calculations. Round your answer to three decimal places.
$
million
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