Question: Begin with the same setup as Example 22.2: Fuelcos investment in Project C. Now, in addition to the assumptions made in the example, we add

Begin with the same setup as Example 22.2: Fuelco’s investment in Project C. Now, in addition to the assumptions made in the example, we add an additional possibility: Fuelco has an option to sell the patents that underlie Project C for $100M in exactly three years. They can only sell these patents if they have not yet invested the required $200M in the project. Selling the patents has no effect on any of Fuelco’s other projects. How does this new option affect the NPV of Project C?

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