- Question 2 (1 point) Dimes Lighting is planning to invest in the development of a lighting fixture. It has two phases: a development phase and an investment phase. It has decided to go ahead with the development phase. This preliminary phase will last one year and cost $100 million. The firm believes there is an 80% chance that tests will prove successful. In this case, the firm can sell 100 million units per year, at $5 per fixture. If the initial tests are not successful (with a 20% chance), the firm is expected to sell 50 million units per year, at $5 per fixture. Each unit costs $2 to manufacture. The annual fixed costs are $50 million, and annual depreciation expense is $20 million Tax rate is 30% and discount rate is 10%. This investment phase will cost $150 million. Production will occur over the following 2 years. NOWC and salvage value are assumed to be $0. What's the expected NPV from this project as of the end of Tear 1 tl)? $3.80 $142.73 $114.18 O-$4.96 0-$48.18