Texas Oil is drilling an oil well. The drilling rig costs $910 today, and in one year the well is either a success or a failure. The outcomes are equally likely. The discount rate is 8%. The value of the successful payoff at t=1 is $1,580. The value of the unsuccessful payoff at t=1 is $0. However, in case of failure, the firm can abandon the rig and sells it for $550 at t=1. What is the value of the abandonment option? (Hint: the value of the abandonment option is the difference between the NPV of the project with the abandonment option and the NPV of the project without the abandonment option) $254.63

- $178.52

$76.11

$0.00

$102.41