3. High Roller Properties is considering building a new casino at a cost of $10.5 million at t= 0. The after-tax cash flows the casino generates will depend on whether the state imposes a new income tax, and there is a 50-50 chance the tax will pass. If it passes, after-tax cash flows will be $1.875 million per year for the next 5 years. If it doesn't pass, the after-tax cash flows will be $3.75 million per year for the next 5 years. The project's WACC is 10.6%. If the tax is passed the firm will have the option to abandon the project 1 year from now, in which case the property could be sold to net $6.7 million after tax at t=1. What is the value (in thousands) of this abandonment option? Do not found intermediate calculations. a. $433 1 b. $377 C. $395 d. $414 e. $320 Want Company is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's projected IRR can be less than the WACC or negative, in both cases it will be rejected. Year 0 1 2 3 4 Cash flows -$1579 $400 $400 $400 $400 a. 0.53% b. 0.50% c. 0.41% d. 0.56% e. 0.43%