The impact of the real option on the minimum required NPV is typically to lower the threshold for accepting the project. The reason for this is that the option to expand provides the company with the opportunity to adapt its strategy based on the outcomes of the initial investment. This flexibility can mitigate some uncertainties associated with the project. In traditional NPV analysis, the decision is made based on a fixed set of cash flows and discount rates. However, when considering real options, the decision-maker values the flexibility to adjust the project based on future information. As a result, the minimum NPV required for the project to be acceptable is often lower than it would be in a scenario without real options. In summary, the presence of a real option, such as the option to expand in your case, tends to reduce the minimum required NPV for the project. This reflects the added value of flexibility and the ability to make informed decisions as the project unfolds