A nment Score: 4.00 Save Submit Assignment for Grading Questions Problem 26-01 Question 5 of 17 Check Sty Work (1 remaining) eBook Problem Walk-Through Problem 26-01 Investment Timing Option: Decision-Tree Analysis Kim Hotels is interested in developing a new hotel in Seoul. The company estrates that the hotel would require an initial inwestment of $19 million, Kim expects the hotel will produce positive cash flows of $3.23 million a year at the end of each of the next 20 years. The project's cost of capital is 13%. ips Tips Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 10 a. What is the project's not present value? A negative valun should be entered with a negative sion 1.200.000. Round your answer to two decimal places O 11. exion ial of ITED b. Kim expects the cash flows to be $3.23 million a year, but it recognies that the cash flows ou actually be much cher or lower depending on whether the Korean government imposes a large hotel tax, One year from now, Kim will know whether the tax will be imposed. There is a 50% chance that the tax will be imposed, in which case the early cash flows will be only $1.9 million. At the same time, there is a 50% chance that the tax will not be imposed, in which case the yearly cash flows will be $4.56 million Kim is deciding whether to proceed with the hotel today or to wait a year to find out whether the tax will be imposed. If Kim waits a year, the initial investment will remain at $19 million. Assume that all cash flows are discounted at 13%. Use decision-tree analysis to determine whether in should proceed with the project today or wait a year before deciding It makes sense to wait a year before deciding 3 Hide Feedback Partially Correct Check My Work (1 remaining) A obte pe here to search - D 1 436 PM A71272020