Expansion Option. Now suppose that Hit or Miss Sports from the previous problem can ex- pand production if the project is successful. By paying its workers overtime, it can increase production by...

Expansion




Option.



Now suppose that Hit or Miss Sports from the previous problem can ex- pand production if the project is successful. By paying its workers overtime, it can increase production by 20,000 units; the variable cost of each ball will be higher, however, equal to

$35 per unit. By how much does this option to expand production increase the NPV of the project?