$(1$ point$)$ Suppose you are working as a financial analyst at a mining firm. You are asked to recommend a bid on this mine. That is$,$ recommend values for B$1$ and B$2$ that produce a reasonable and competitive bid. You do not want to overpay, but you also do not want to lose out on the potential $$1\mathrm{.}25$ billion. Explain your bid decision clearly. To proceed, consider the firm$$s expected profit. The project$$s net present value would be the expectation of: max$(0,$ ST $$ K $$ penalty$)$ B$1*$B$1$ is paid upfront and known at the time of the bid, but the rest are unknown today. The penalty would be any shortfall for investing less than B$2$ in the mine after five years. This case is an example of a real option, and the bidding design itself affects the structure of the option.