Ch $13-$ End$-$of$-$Chapter Problems$-$LPK $-$ Real Options and Other Topics in Capital Budgeting

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Attempt $$ Keep the Highest $/15$

Problem $13\mathrm{.}01($Growth Option$)$

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$13-2$: Growth $($Expansion$)$ Options ether to proceed with Project $x.$ The after$-$tax cost would be $$11$ million in Year $0.$ There is a $50\%$ chance that $x$ would be hugely successful and would generate annual after$-$tax cash flows of $$9$ milli ever, there is a $50\%$ chance that $x$ would be less successful and would generate after$-$tax cash flows of only $$1$ million per year for the $3$ years. If Project $x$ is hugely successful, it would open the doc minus sian. Do not round intermediate calculations. Round your answer to three decimal places.

$ million intermediate calculations. Round your answer to three decimal places.

$ million calculations. Round your answer to three decimal places.

$ million