You are planning to produce a new action figure called "Nia." However, you are very uncertain about the demand for the product. If it is a hit, you will have net cash flows of $$86$ million per year for three years $($starting next year $[$l$.$e$.,$ at $t=1).$ If it falls, you will only have net cash flows of $$46$ million per year for two years $($also starting next year$).$ There is an equal chance that it will be a hit or failure $($probability $=50$ percent$).$ You will not know whether it is a hit or a failure until the first year's cash flows are in $($i$.$e$.,$ at $t=1).$ You must spend $$152$ million immediately for equipment and the rights to produce the figure. If you can sell your equipment for $$96$ million once the first year's cash flows are received, calculate the value of the abandonment option. $($The discount rate is $10$ percent.$)$

Multiple Choice

$$0\mathrm{.}00$

$-$$$5\mathrm{.}15$

$$24\mathrm{.}63$

$$19\mathrm{.}48$