Part B please

Growth Option: Decision-Tree Analysis Fethe's Funny Hats is considering selling trademarked, orange-haired curly wigs for University of Tennessee football games. The purchase cost for a 2-year franchise to sell the wigs is $20,000. If demand is good (40% probability), then the net cash flows will be $25,000 per year for 2 years. If demand is bad (60% probability), then the net cash flows will be $6,000 per year for 2 years. Fethe's cost of capital is 12%. 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. $ 2984.6 b. If Fethe makes the investment today, then it will have the option to renew the franchise fee for 2 more years at the end of Year 2 for an additional payment of $20,000. In this case, the cash flows that occurred in Years 1 and 2 will be repeated (so if demand was good in 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 5% Select the correct decision tree. A B 0 40% Pob 20.000 25000 25000 25,000 25000 Good - 20.000(0) 40% Pob Good 5% 2 20.000 25000 25000 25000 25.000 - 20.000( 12%) Bad 10%, Prob - 20 000 0.000 0.000 Bad 609 Pro 20 000 0000 O 0.000 0 0 D 40% Pob Good 0 3 20.000 6000 6000 6000 6000 - 20000 (5 40% POD Good 24 1 4 20.000 25000 25.000 25000 25000 20.000 (T-05) Bad Bad 60% Prob 60% Probe 20.000 25000 25000 0 0 20.000 6000 6000 0.000 0.000 The correct graph is -Select- Use decision tree analysis to calculate the expected NPV of this project, including the option to continue for an additional 2 years. Negative values, if any, should be indicated by a minus sign. Round your answer to the nearest dollar 5