Suppose you are considering building a factory that produces turbo jets. Price of a turbo jet right now is $200. Next year the price could go up to $220 or go down to $180 or stay at $200 with equal probabilities. The price then remains fixed for a long time. (This assumption makes this cash flow risky). This will be your revenue. Cost of factory is $300 and it can be built right away since you have infrastructure in place. WACC is 30%. Cost of debt is 10%. You have the option to wait one year and see whether the price goes up or down and then invest only if price is above $180? What is the NPV? 414.22 167.52 312.82 566.67