can you include the decision tree process?

3. Kinston Industries has come up with a new mountain bike prototype and is ready to go ahead with pilot production and test marketing. Kinston can immediately pay $500,000 for pilot production and test marketing. Your management team believes that there is a 50% chance that the test marketing will be successful and that there will be sufficient demand for the new mountain bike. If the test marketing phase is successful, then Kinston Industries will invest $3 million in one year to build a plant that will generate expected annual after tax cash flows of $400,000 in perpetuity beginning in year two. If the test marketing is not successful, Kinston can still go ahead and build the new plant, but the expected annual after tax cash flows would be only $200,000 in perpetuity beginning in year two. Kinston has the option to stop the project at any time and sell the prototype mountain bike to an overseas competitor for $300,000. Kinston's cost of capital is 10%. What is the NPV? (test market benefit = $90,909; sell immediately benefit = $300,000), better to sell immediately 4. Kinston Industries has come up with a new mountain bike prototype and is ready to go ahead with pilot production and test marketing. Kinston can immediately pay $500,000 for pilot production and test marketing. Your management team believes that there is a 50% chance that the test marketing will be successful and that there will be sufficient demand for the new mountain bike. If the test-marketing phase is successful, then Kinston Industries will invest $3 million in one year to build a plant that will generate expected annual after tax cash flows of $400,000 in perpetuity beginning in year two. If the test marketing is not successful, Kinston can still go ahead and build the new plant, but the expected annual after tax cash flows would be only $200,000 in perpetuity beginning in year two. Kinston has the option to not build the plant. Kinston's cost of capital is 10%. What is the NPV? (test market benefit = $-45,454.55; do nothing benefit = $0), better to do nothing