with calculations and reason

Question 5.7 (10pts) A corporation is trying to decide whether to buy the patent for a product designed by another company. The decision to buy will mean an investment of $12 million, and the demand for the product is not known. If demand is light, the company expects a return of $2.3 million each year for three years. If demand is moderate, the return will be $4.8 million each year for four years, and high demand means a return of $6.9 million each year for four years. It is estimated the probability of a high demand is 0.35, and the probability of a light demand is 0.2. The firm's (risk-free) interest rate is 15%. Calculate the expected present worth of the patent. (All figures represent after-tax values.) A) $2,111,810 B) $1,874,237 C) $2,564,594 D) Answers A, B and C are not correct