(This question has multiple parts.) You can invest in a project either now or next year. If it is successful, you get an expected cash flow of $75 million the following year (the year after investing). If it is unsuccessful, you get an expected cash flow of $9 million the following year the year after investing). The project costs $20 million at the time of the initial investment and has a discount rate of 10%. The chance of success is 50%. Answer the following questions: 1. What is the NPV of the project if you invest today? $ million (round to two decimals) 2. If you wait a year, you will know whether the project will be successful (the chance of success is still 50%). What is the NPV today of the project if you decide to wait a year before making your decision? million (round to two decimals) 3. What is the value of the option to wait? million (round to two decimal) 4. How much would you be willing to pay to acquire this option to wait? Enter your answer in each of the answer boxes S ? E esc ? 15 16 (This question has multiple parts.) You can invest in a project either now or next year. If it is successful, you get an expected cash flow of $7. million the following year (the year after investing). If it is unsuccessful, you get an expected cash flow of million the following year the year after investing). The project costs $20 million at the time of the initial investment and has a discount rate of 10%. The chance of success is 50%. Answer the following question: 2. If you wait a year, you will know whether the project will be successful (the chance of success is still 50%). What is the NPV today of the project if you decide to wait a year before making your decision? million (round to two decimals) 3. What is the value of the option to wait? 8 million (round to two decimals) 4. How much would you be willing to pay to acquire this sption to wait? You should be willing to pay up to $ million to acquire this option. (round to two decimals) Enter your answer in each of the answer boxes hp esc ? * 15 @ # $ 2 $ 3 4. % 5 6 & 7