The Schuster Company, a major yacht maker in country, is entitled, initially on the 12 m boats that contested for the America's Cup, to construct a new 30-foot sailboat based on the keels. First, for the construction and model unit building of the big yacht Schuster would have to spend $10,000. Schuster management feel that this phase is 60 percent likely to succeed and the project will resume. If Stage 1 fails, the project is dropped with a value of zero salvage. The next step would be to produce the molds and produce two prototype boats if done. Next period, this costs $500,000. Schuster would be produced if the boats were to test well. If they do not, they could sell molds and prototypes for $100,000. The management believe that the chances of the boats passing the tests and Stage 3 is 80 per cent. Phase 3 comprises of the transformation to develop the new design of an underutilized manufacturng line. It would cost $1 million. If at this moment the economy is strong, net sales would amount to 3 million dollars; if the economy is poor, the net sales would amount to 1,5 million dollars. Both net values appear at t = 3 and the likelihood is 0.5 for each condition of the economy. Suppose the average risk for this project. Build a decision tree and establish the anticipated NPV of the project. b. Find a standard project NPV deviation and NPV variation coefficient. Will this project be at high, low or moderate self-containing risk if the typical project of Schuster has a CV between 1.0 and 2.0