Walmart is considering a new store in Queensland that requires and investment of$$2,500,000$ now. The store is expected to generate a present value cashflow of$$2,000,000$ from this investment. The standard deviation of expected cash flow is quiterisky at $30\%.$ The ten year risk$-$free rate is currently at $5\%.$ The current agreement allowsWalmart to close the store anytime in the next $10$ years and sell the land for $$350,000$

a$.$ Should Walmart accept or reject the investment opportunity after considering theabandonment option? Show the values of the various components of the Black &Scholes formula using excel spreadsheet

b$.$ How would your decision change if Walmart has an option to expand the storeanytime in the next $10$ years? The cost of expansion would be $$1,500,000$ and thebest estimation of the present value of this expansion is $$1,200,000.$ The standarddeviation and risk$-$free rate will be the same as above. For part $($b$)$ assume that theoption to abandon' does not exist. Show the values of the various componentsof the Black & Scholes formula using excel spreadsheet