Growth option Martin Development Co. is deciding whether to proceed with Project X.

The cost would be $9 million in Year 0. There is a 50 percent chance that X would be

hugely successful and would generate annual after-tax cash flows of $6 million per year

during Years 1, 2, and 3. However, there is a 50 percent chance that X would be less

successful and would generate only $1 million per year for the 3 years. If Project X is

hugely successful, it would open the door to another investment, Project Y, that would

require a $10 million outlay at the end of Year 2. Project Y would then be sold to another

company at a price of $20 million at the end of Year 3. Martins WACC is 11 percent.

a. If the company does not consider real options, what is Project Xs NPV?

b. What is Xs NPV considering the growth option?

c. How valuable is the growth option?- I need step by step how to get to the solution . please. thank you.