Question: Same as before, except that the project has the option to expand. The static project value now is $146 million, the standard deviation of static

Same as before, except that the project has the option to expand. The static project value now is $146 million, the standard deviation of static project value is 63.0%, the riskfree rate is 0.00%, the project can be expanded by 75% at any time for an expansion cost of $130.0 million, the time to project completion is 2.4 years, and an 8 period binomial model will be used. When should the project be expanded? What is the flexible project value? What is the value of the option to expand?

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