Joe Avery recently graduated from college and has an idea for a juice shop using only organic and locally-sourced ingredients. He has saved just enough money to cover the initial investment required to open the shop, $52,000. Using his corporate finance training he estimates that the free cash flow from the shop will be $13,000 per year, forever Investments with similar risk deliver a rate of return of 12%. a) What is the NPV of the project? b) In fact, the annual cash flow of $13,000 is an expected value there is a 50% chance that annual cash flow will be $32,500 and a so chance that it will be $6,500. Because of a very restrictive leasing contract, he cannot close down the shop even if there is no demand Nor can he expand, since he will have no more money. What is the expected NPV of the project? c) Fortunately, Joe's rich relatives are willing to provide him with enough capital to open another 6 shops after the first year if there is a lot of demand. What is the true NPV of the (combined) project? d) What is the value of the option to expand