Suppose that we have the following investment opportunity. Today, we can invest in project A requiring $3.75 million to develop a test market for the next two years. Based on the results of the test market, if things look good, we have the right to invest (in project B) another $10 million in 2 years. Hence, making an investment now gives us an option to make an additional investment in year 2. If we make the $10 million investment, it has an expected value of $15 million (S). The risk-adjusted discount rate is 18% and the simple annual risk-free interest rate is 5%. The annual standard deviation of returns to project B over the next 2 years is calculated as 280%. What should we do? Should we invest in this project A? Show all work. Hint: What option does the test marketing get us? What is the value of this option?