the first question is what is the value of this option ?

U The following data is for the next 7 questions (24-30) The Dust Devil Ltd. (DD) is a gold exploration firm operating in Western Australia. The company is considering loncinn tun vilig gold. These fields are referred to as Field A and Field B throughout this question. Because the fields are adjacent, DD assumes the amount of gold in Field A and Field B is the same. DD estimates there are two possible outcomes, each with a likelihood of 50%. Either: Field A and Field B each hold 350 ounces of gold; or . There is no gold in the fields. It Cost of leasing the land for one year $50,000 (per field) Cost of leasing equipment for one year (per field) $250,000 Price of gold per ounce $2,000 You are given the following information: $50,000 (per field) Cost of leasing equipment for one year (per field) $250,000 Price of gold per ounce $2,000 You are given the following information: . . Land and equipment must be leased for at least one year. Other costs (such as labour and administrative costs) are to be ignored. All costs must be paid at the beginning of the year. The revenue from selling the gold will be received at the end of the year. DD's cost of capital is 10% and is not affected by its investment decisions. . The company's CEO correctly calculated that the NPV of leasing the two fields is positive, and suggested DD should lease the two fields today. You suggest an arc . DD should today lease Field A for one year (paying $50,000 today) and Field B for two years (paying $100,000 today). DD will explore gold in Field A for one year, and at the end of the year decide whether to explore for gold in Field B in the second year. Note that equipment costs are incurred only in the year in which you operate the field