The yoran yacht company (yyc), a prominent sailboat builder in newport, may design a new 30-foot sailboat based on the "winged" keels first introduced on the 12-meter yachts that raced for the america’s cup. first, yyc would have to invest $10,000 at t = 0 for the design and model tank testing of the new boat. yyc’s managers believe there is a 60% probability that this phase will be successful and the project will continue. if stage 1 is not successful, the project will be abandoned with zero salvage value. the next stage, if undertaken, would consist of making the molds and producing two prototype boats. this would cost $500,000 at t = 1. if the boats test well, yyc would go into production. if they do not, the molds and prototypes could be sold for $100,000. the managers estimate the probability is 80% that the boats will pass testing and that stage 3 will be undertaken. stage 3 consists of converting an unused production line to produce the new design. this would cost $1 million at t = 2. if the economy is strong at this point, the net value of sales would be $3 million; if the economy is weak, the net value would be $1.5 million. both net values occur at t = 3, and each state of the economy has a probability of 0.5. yyc’s corporate cost of capital is 12%.(a) assume this project has average risk. construct a decision tree and determine the project’s expected npv.