Please answer all problems & show work!

Growth Option: Option Analysis Fette Funny Hats is considering selling trademarked, orange haared curly wigs for University of Tennessee football games. The purchase out for a 2 year franchise to sell the wins is $20,000/ demand is good (40% probability), then the net cash flows will be 25,000 per year for years. If demand is bad (60% probability then the net cash flows will be $5,000 per year for 2 years Fethe's cost of capitalist . What is the expected NPV of the project Round your answer to the nearest dolor b. Fete nukes 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 (50 if demand was good in Years 1 and 2 it will continue to be good in Years 3 and 4): use the Black Scholes mode to estimate the value of the option. Assume the variance of the project's rate of return is 0.3074 and that the risk-free titel. Do not round intermediate calculations. Round your answers to the nearest dollar Use computer software packages, such as Minitab or Excel, to solve this problem Value of the growth options Value of the entire project: 5