Part a is already solved, please help solve part b and c. Please show all steps!

Problem 1. In your new role as a project financial analyst, you are tasked to evaluate project Tetra, a new and innovative software that allows doctors from around the world to communicate current best practices in real time. The project has two phases: you may invest in the first, both, or neither. Phase 1 (Tetra 1) requires an initial investment of $100. One year later, Tetra 1 will produce project CFs of either $160 or $60, each with equal probability of occurrence. At this year 1 point and after cash flows have been received, you may invest an additional $100 for Tetra 2. One year later, Tetra 2 pays out either 20% more in project CFs than Tetra 1 or (equally likely) 20% less. No taxes need to be assumed. Part 1 a: How much would the Tetra project be worth if it offered only the Tetra 1 opportunity? Part 1 b: How much would Tetra be worth if you had to make the entire decision today, once and for all, whether or not to invest 3 in Tetra? Part 1 c: How much is Tetra project worth if you have access to both Tetra 1 and 2, but can wait to decide whether to invest in Tetra 2 after 1 year (i.e. can see Tetra 1 through)? Utilize Typing Numbers is okay The Scenario Labels Hints Equations/functions 5 5 -7 0.10 required return B $ $ 0 (100.00) (100.00) $45.45 1 160 $145.45 $ $ o Part 1 a 1 Tetra 1 best 2 Project CF 3 PV Project CFS 4 NPV 5 6 Tetra 1 worst 7 CAPEX 8 PV Project CFS 9 NPV O NPV of whole project 1 2 Part 1 b 3 Tetra 1 best, Tetra 2 best 4 CAPEX 5 OCF 6 project CF 7 NPV 1 (100.00) 60 (100.00) $54.55 ($45.45) $0.00 accept/reject? (choose 1) 2 0 -$100 $100 -$100 $260.71 1 $160 -$100 $251 $260 $192 B D E F 0 1 $ $ (100.00) (100.00) $45.45 160 $145.45 $ $ 0 1 (100.00) 60 (100.00) $54.55 ($45.45) $0.00 accept/reject? (choose 1) 2 0 $100 Saco 7400 SC31 0 9160 PA A 10 Part 1 a 11 Tetra 1 best 12 Project CF 13 PV Project CFS 14 NPV 15 16 Tetra 1 worst 17 CAPEX 18 PV Project CFS 19 NPV 20 NPV of whole project 21 22 Part 1 b 23 Tetra 1 best, Tetra 2 best 24 CAPEX 25 OCF 26 project CF 27 NPV 28 Tetra 1 best, Tetra 2 worst 29 CAPEX 30 OCF 31 project CF 32 NPV 33 Tetra 1 worst, Tetra 2 best 34 CAPEX 35 OCF 36 project CF 37 NPV 38 Tetra 1 worst, Tetra 2 worst 39 CAPEX 40 OCF 41 project CF 42 NPV 43 NPV overall 44 45 Part 10 46 Tetra 2 best 47 CAPEX 48 OCF 49 project CF 50 NPV tetra 2 best at year 1. 51 Tetra 2 worst 52 CAPEX 53 OCF 54 project CF 55 NPV tetra 2 worst year 1. 56 NPV total tetra 2 at year 0. 1 0 2 accept/reject? (choose 1) 0 1 $0 SO $0.00 1 0 2 $0 $0 Hints: value Tetra 2 on it's own (ignore relevant CFs from Tetra 1). First at time 1, 57 then discount back to time 0. NPV for whole project & 58 option accept/reject? (choose 1) Hints: You've already valued Tetra 1 in "Part 1a" (NPV from cell B27), now cell B63 is the NPV of Tetra 2, but remember the likelihood of taking on Tetra 2 is not 100%...calculate NPV of the whole project and the real option. 59 60 Problem 1. In your new role as a project financial analyst, you are tasked to evaluate project Tetra, a new and innovative software that allows doctors from around the world to communicate current best practices in real time. The project has two phases: you may invest in the first, both, or neither. Phase 1 (Tetra 1) requires an initial investment of $100. One year later, Tetra 1 will produce project CFs of either $160 or $60, each with equal probability of occurrence. At this year 1 point and after cash flows have been received, you may invest an additional $100 for Tetra 2. One year later, Tetra 2 pays out either 20% more in project CFs than Tetra 1 or (equally likely) 20% less. No taxes need to be assumed. Part 1 a: How much would the Tetra project be worth if it offered only the Tetra 1 opportunity? Part 1 b: How much would Tetra be worth if you had to make the entire decision today, once and for all, whether or not to invest 3 in Tetra? Part 1 c: How much is Tetra project worth if you have access to both Tetra 1 and 2, but can wait to decide whether to invest in Tetra 2 after 1 year (i.e. can see Tetra 1 through)? Utilize Typing Numbers is okay The Scenario Labels Hints Equations/functions 5 5 -7 0.10 required return B $ $ 0 (100.00) (100.00) $45.45 1 160 $145.45 $ $ o Part 1 a 1 Tetra 1 best 2 Project CF 3 PV Project CFS 4 NPV 5 6 Tetra 1 worst 7 CAPEX 8 PV Project CFS 9 NPV O NPV of whole project 1 2 Part 1 b 3 Tetra 1 best, Tetra 2 best 4 CAPEX 5 OCF 6 project CF 7 NPV 1 (100.00) 60 (100.00) $54.55 ($45.45) $0.00 accept/reject? (choose 1) 2 0 -$100 $100 -$100 $260.71 1 $160 -$100 $251 $260 $192 B D E F 0 1 $ $ (100.00) (100.00) $45.45 160 $145.45 $ $ 0 1 (100.00) 60 (100.00) $54.55 ($45.45) $0.00 accept/reject? (choose 1) 2 0 $100 Saco 7400 SC31 0 9160 PA A 10 Part 1 a 11 Tetra 1 best 12 Project CF 13 PV Project CFS 14 NPV 15 16 Tetra 1 worst 17 CAPEX 18 PV Project CFS 19 NPV 20 NPV of whole project 21 22 Part 1 b 23 Tetra 1 best, Tetra 2 best 24 CAPEX 25 OCF 26 project CF 27 NPV 28 Tetra 1 best, Tetra 2 worst 29 CAPEX 30 OCF 31 project CF 32 NPV 33 Tetra 1 worst, Tetra 2 best 34 CAPEX 35 OCF 36 project CF 37 NPV 38 Tetra 1 worst, Tetra 2 worst 39 CAPEX 40 OCF 41 project CF 42 NPV 43 NPV overall 44 45 Part 10 46 Tetra 2 best 47 CAPEX 48 OCF 49 project CF 50 NPV tetra 2 best at year 1. 51 Tetra 2 worst 52 CAPEX 53 OCF 54 project CF 55 NPV tetra 2 worst year 1. 56 NPV total tetra 2 at year 0. 1 0 2 accept/reject? (choose 1) 0 1 $0 SO $0.00 1 0 2 $0 $0 Hints: value Tetra 2 on it's own (ignore relevant CFs from Tetra 1). First at time 1, 57 then discount back to time 0. NPV for whole project & 58 option accept/reject? (choose 1) Hints: You've already valued Tetra 1 in "Part 1a" (NPV from cell B27), now cell B63 is the NPV of Tetra 2, but remember the likelihood of taking on Tetra 2 is not 100%...calculate NPV of the whole project and the real option. 59 60