4b help solve

Analysts will use these values in the Black-Scholes model, which is represented by the following formula: v = P[N(dj)] - Xe-FRFi[N(d2)] Based on the data collected and results from the calculations, estimate the input values to be used in the Black-Scholes OPM: I'RF = Risk-Free Interest Rate = Time until Option Expires X = Cost to Implement the Project P = Current Value of the Project 62 = Variance of the Project's Rate of Return Nd1 = Cumulative Normal Distribution Function of dj = N(fin ( ) + CERF + (2 )]t> / (0+1/2)) Ndz = Cumulative Normal Distribution Function of d2 N (d1 - ) Based on the data given, calculate the value of the project, its return, and the standard deviation of the returns (using the direct method) if the company decides to wait for a year. (Cash flow values in the table are in millions. Round your answers to two decimal places). Return = (PV Cash Probability (P Now: Yr. Yr. Yr. Yr. PV Cash PV Cash Flows, - PriceYear( ) / PriceProbability (Pj ) j) x PV Cash Yr. 2 3 flows (t=1) flows (t=0) Year0 x Return flows High 0.45 $40 $40 Average 0.35 $25 $25 $25 Low 0.20 $10 $10 $10 Expected return (t=1): Standard deviation of returns: Expected Value of PVs (t=1): Expected Value of PVs (t=0): The company believes that this project has a strong selling feature but is uncertain that it would earn cash flows as projected. The team propos project has come up with the following data: Demand Probability Annual Cash Flow High 0.45 $40 million Average 0.35 $25 million Low 0.20 $10 million Project's cost of capital 13% Life of project Three years 52-week Treasury note 5% Screenshots: Use these below screenshots as reference to the charts on assignment #4