You are the CEO of and oil company, and you are considering the prospect of acquiring an oil property. If you invest in developing the property, the cash flow will start in the very first year, and the Present Value of the cash flows from the property is $70 million. However, the present value of the development costs required is $30 million. You do not have to start developing the property immediately, but the maximum you can wait is 6 years. If not developed after 6 years, your lease will expire. Once developed, however, the property is yours until the reserve is depleted. Interest rate is 8.24% per annum. You estimate that the volatility of crude oil prices is 40%.

Which of the following statements is INCORRECT?

	a.	You have enough information to calculate Black Scholes value of the real option
	b.	The project has NPV of 40 million
	c.	Since your lease is expiring in 6 years if not developed, the real option to develop the property has 6 years to expiration
	d.	The project's NPV includes the value of the right to wait to develop the property