第一年确定高需求，expansion的话，原项目的现金流也应该确定为60吧

问题如下：

Company M has a four-year project with an expansion option, which depends on the demand at the end of the 1^st year. Whether demand is -high- or -low- in Years 1–4 will be determined during the first year. The probabilities of -high- or -low- demand are equal. The cost of capital is 12%. We should notice that the expansion option will not exist if the initial investment is not made. The detailed information of the project is given in the following tables.

The initial project:

Additional cash flows with the optional expansion project:

The NPV of the initial project without the real option is given to be -13.32, what’s the NPV of project including the expansion option?

选项：

A.

-$6.11 million

B.

$6.37 million

C.

$19.69 million

解释：

B is correct.

考点：Evaluating Projects with Real Options

解析：t=1时，如果是高需求，NPV_expansion = -100 + $\sum_{t=1}^3\frac{60}{1.12^t}$= $44.11 million，此时扩张期权会执行。如果是低需求，NPV_expansion = -100 +$\sum_{t=1}^3\frac{30}{1.12^t}$ = -$27.95 million，此时扩张期权不会执行。

t=0时，Expected NPV_expansion = 0.5*44.11/1.12 = $19.69 million

因此在考虑了扩张期权之后的NPV = -13.32 + 19.69 = $6.37 million