Question: Growth Option: Decision - Tree Analysis 2 years. If demand is bad ( ( 6 0 % ) probability ) , then

Growth Option: Decision-Tree Analysis 2 years. If demand is bad (\(60\%\) probability), then the net cash flows will be \(\$ 7,000\) per year for 2 years. Fethe's cost of capital is \(13\%\). Do not round intermediate calculations. a. What is the expected NPV of the project? Negative value, if any, should be indicated by a minus sign. Round your answer to the nearest dollar. Years 1 and 2, it will continue to be good in Years 3 and 4). Write out the decision tree. Note: The franchise fee payment at the end of Year 2 is known, so it should be discounted at the risk-free rate, which is \(8\%\). Select the correct decision tree. A B C D The correct graph is
Growth Option: Decision - Tree Analysis 2 years.

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