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Question 2. A company is considering investing in a project with an option to abandon...

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Finance

Question 2. A company is considering investing in a project with an option to abandon it in the future if the market condition turns unfavorable. The company estimates the following scenarios. Please calculate the value of the option (2 points)Favorable market condition: NPV=$12,758Unfavorable market condition with option to abandon early: NPV=-$12,260Unfavorable market condition without option to abandon early: NPV=-$65,250Probability of favorable market condition: 75%Probability of unfavorable market condition: 25%

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