13-1 Growth optionMartin Development Co. is decidingwhether to proceed with Proj

13-1 Growth optionMartin Development Co. is decidingwhether to proceed with Project X. The cost would be $9 million inYear0. There is 50% chance that X would be hugely successful andwould generate annual after-tax cash flows of $6 million per yearduring Years 12 and 3. However there is a 50% chance that Xwould be less successful and would generate only $1 million peryear for the 3 years. IF Project X is hugely successful it wouldopen the door to another investment Project Y which would requirean outlay of $10 million at the end of Year 2. Project Y would thenbe sold to another company at a price of $20 million at the end ofYear 3. Martins WACC is 11%.