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Singh Development Co$.$ is deciding whether to proceed with Project X$.$ The after$-$tax cost would be $$7$ million in Year $0.$ There is a $50\%$ chance that X would be hugely successful and would generate annual after$-$tax cash flows of $$5$ million per year during Years $1,2,$ and $3.$ However, there is a $50\%$ chance that X would be less successful and would generate after$-$tax cash flows of only $$1$ million per year for the $3$ years. If Project X is hugely successful, it would open the door to another investment, Project Y$,$ which would require an after$-$tax outlay of $$7$ million at the end of Year $2.$ Project Y would then be sold to another company netting $$14$ million after taxes at the end of Year $3.$ Singh$$s WACC is $13\%.$

If the company does not consider real options, what is Project X$$s expected NPV$?$ Enter your answers in millions. For example, an answer of $$10,550,000$ should be entered as $10\mathrm{.}55.$ Negative value, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to three decimal places.

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million

What is X$$s expected NPV with the growth option? Enter your answers in millions. For example, an answer of $$10,550,000$ should be entered as $10\mathrm{.}55.$ Negative value, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to three decimal places.

$

million

What is the value of the growth option? Enter your answers in millions. For example, an answer of $$10,550,000$ should be entered as $10\mathrm{.}55.$ Negative value, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to three decimal places.

$

million

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