Question: Please provide the CORRECT answer to this question. Please read the question CAREFULLY and DOUBLE CHECK your answer BEFORE posting it. Thank you! Yardie Global

Please provide the CORRECT answer to this question. Please read the question

Please provide the CORRECT answer to this question. Please read the question CAREFULLY and DOUBLE CHECK your answer BEFORE posting it. Thank you!

Yardie Global is considering expanding a cruise line division next year (t=1) or waiting a year due to public health concerns. The cruise line has a discount rate of 11 percent and has an NPV today (t=0) of $40M. If they wait one year for market research, there is a 30 percent chance that the NPV next year (t=1) could be $150M and 70 percent chance that they will sell the division for $2M. The company can consider the option to sell the division as similar to taking a long position on a put option with a strike price equal to $2M. taking a long position on a call option with a strike price equal to $40M. taking a long position on a call option with a strike price equal to $2M

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