Question: Mitata Co. is considering a three-year project that will require an initial investment of $55,000. It has estimated that the annual cash flows for the

 Mitata Co. is considering a three-year project that will require an

Mitata Co. is considering a three-year project that will require an initial investment of $55,000. It has estimated that the annual cash flows for the project under good conditions will be $80,000 and $10,000 under bad conditions. The firm believes that there is a 60% chance of good conditions and a 40% chance of bad conditions. If the firm is using a weighted average cost of capital of 13%, the expected net present value (NPV) of the project is $67,780 your answer to the nearest dollar.) (Note: Round Mtata Co. wants to take a potential growth option into account when calculating the project's expected NPV. If conditions are good, the firm will be able to invest $3,000 in year 2 to generate an additional cash flow of $23,000 in vear 3. If conditions are bad, the firm will not make any further Investments in the project Using the information from the preceding problem, the expected NPV of this project when taking the growth option into account (Note: Round your answer to the nearest dollar) Mitata Cols growth option is worth

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