Question: Tolbotics inc is considering a three-year project that will require an initial investment of $42,500. If market demand is strong, Tolbotics Inc, thinks that the

Tolbotics inc is considering a three-year project that will require an initial investment of $42,500. If market demand is strong, Tolbotics Inc, thinks that the project will generate cash flows of $28,500 per year. However, if market demand is weak, the company believes that the project will generate cash flows of only $1,250 per year. The company thinks that there is a 50% chance that demand will be strong and a 50% chance that demand will be weak If the company uses a project cost of capital of 13%, what will be the expected net present value (NPV) of this project? (Note: Do not round intermodiate calculations and round your answer to the nearest whole dollar) 58,116 $6,271 $6,640 57,378 Tolbotics Inc. has the option to delay starting this project for one year so that analysts can gather more information about whether demand will be strong or weak. If the company chooses to delay the project, it will have to give up a yearf of cash flows, becjuse the project will then be only a twoyear oroject. However, the company will know for cortain if the market demand will be strong or weak before declaing to invest in it. What will be the expected NPV if Tolboties Ific. delays starting the project? (Note: Do not round intermediate calculations and round your answer to the nearest whole dollar.) 52,230 $9,608 $2,007 $9,593 What is the value of Tolbotics incis option to delay the start of the project? (Note: Do not round intermediate calculations and round your answer to the nearest whole doflar.) $9,593 $9,608 $2,007 $2,230
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