Question: A project has expected cash flows with a present value of $78 million. The annual standard deviation of the project's returns is 60%. If the

A project has expected cash flows with a present value of

A project has expected cash flows with a present value of $78 million. The annual standard deviation of the project's returns is 60%. If the project does not go well, the company can end it in 1 year and sell all project assets for $52 million (after taxes). The risk-free rate is 4% (continuously compounded). IS Attempt 1/3 for 10 pts. Part 1 What is the value of the option to abandon (in $ million)? 1+ decimals A project has expected cash flows with a present value of $78 million. The annual standard deviation of the project's returns is 60%. If the project does not go well, the company can end it in 1 year and sell all project assets for $52 million (after taxes). The risk-free rate is 4% (continuously compounded). IS Attempt 1/3 for 10 pts. Part 1 What is the value of the option to abandon (in $ million)? 1+ decimals

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