The current price of gold is $400 per ounce. Colorado Gold Mines is planning to invest in a gold mine in Indonesia. The price of gold at the end of one year is expected to be $425 or $325. The cost of extracting the gold, including the development cost, is expected to be $375 and the first year output is expected to be 10,000 ounces. If the conditions are unfavorable the gold mine will be shut down. The risk free rate of interest is 5% find the value of the project.