Your company has a growth opportunity. Your options are:

1. Do not pursue the opportunity.

2. Invest 1 million now. If the project succeeds, it will return 1.2 million in free cash

flow. If not, it will return 0.4 million in free cash flow. After finding out whether the

project succeeds, you will have the option of investing another 1 million in the project,

and that will double the free cash flow, so you receive a total of 2.4 million if the project

succeeds and 0.8 million if it doesn't.

3. Invest 1.8 million now. If the project succeeds, it will return 2.4 million in free cash

flow. If not, it will return 0.8 million in free cash flow.

The probability of success is 0.5. The interest rate is 0.

Determine the value of the best strategy