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A company is evaluating the possible introduction of a new version of an existing product that will have a 2-year life cycle. At the end of 2 years, this version will be obsolete, with no additional cash flows or salvage value. The initial and sole outlay for the modified product is $6 million, and the company’s desired rate of return is 10%. Following are the potential cash flows (assumed to occur at the end of each year) and their probabilities if the product is marketed:  Assume the company has the real option to abandon the project at the end of Year If the salvage value at that time is $3 million and the desired rate of return remains at 10%, what is the project’s expected profit?A. $878,050 B. $7,925,000 C. $2,746,450 D. $4,454,100 |