The Yoran Yacht Company (YYC), a prominent sa boat builder in Newport, may design a new 30 -foot salboat based on the "winged" keels first introduced on the 12 -meter yachts that raced for the America's Cup. First, MrC would have to invest $16,000 at t=0 for the design and model tank testing of the new boat, Yrc's managers believe there is a 60% probability that this phase wili be successful and the project wilf continue. If Stage 1 is not successful, the project will be abandoned with zero salvage value. The next stage, if undertaken, would considt of making the molds and producing two prototype boats. This would cost $500,000 at t=1. If the boats test well, FYC would go into production. If they do not; the molds and prototypes could be sold for 5100,000 . The managers estimate that the probability is 80% that the boats will pass testing and that stage 3 wili be undertaken. Stage 3 consists of corverting an unused production line to produce the new design. This would cost 51 million at t=2. If the economy is strong at this point, the net value of sales would be $3 milion; if the economy is weak, the net value would be $1.5 melion. Both net values occur at t=3, and each state of the economy has a probabaty of 0.5 . MrC's corporate cost of capital is 12%. a. Assume this project has average risk. Construct a decision tree and determine the project's expected NPV, Do not round intermediate calculations. Enter your answer in dollsers. For example, an answer of $2 million should be entered as 2,000,000. Round your answer to the nearest cent. b. Find the project's standard deviation of NPV and coefficient of variation of NPV, Do not round intermediate calculations. Enter your answer for standard deviation in dollars. For example, on answer of $2 milion should be entered as 2,000,000. Round the project's standard deviation to the nearest cent and CV to two decimal places. oury: 5 CViry: If YCCs average project had a CV of between 1.0 and 2.0 , would this project be of high, law, or average stand-alone risk? This project is of risk. If YYC's average project had a CV of between 1.0 and 2.0 , would this p This project is c isk. average high low