b$)S=70,x=70,$ sigma $=50\%,R_f=8\%,T=\mathrm{.}5y$ yrs$,2$ periods tree

$-u=1\mathrm{.}284,d=\mathrm{.}779,q=\mathrm{.}478,$ European put $=7\mathrm{.}2,$ American put $=7\mathrm{.}9$You$$re planning to scale down the operations of your manufacturing plant

by $70\%$ sometime in the next six months. Suppose the value of the plant

today is $100$m$.$ Your plan is to save $70\%$ from contraction. Risk uncertainty

in the operating environment is estimated by an annualized standard

deviation of $50\%$ in cash flows. The risk$-$free rate of return is $8\%$ per annum.

Use the binomial options pricing approach with a time step of three months

to value the option to scale down operations. Is there an optimal time for

taking such an action? Explain.

Attached screenshot shows that the spot price and strike are both $70.$ I am mainly focused on the intuition behind reaching these $2$ figures.