Part 1:Future Enterprises is considering building a factory that will include an option to expand operations in three years. If things go well, the expansion will have an expected value of $10 million and will cost $2 million to undertake. Otherwise, the expansion will have an expected value of only $1 million and will not take place. What information would we need in order to analyze this capital budgeting problem using the traditional NPV approach that we would not need using option valuation techniques?Note Please note that the requirement is to post your Initial Response (250 words). Make sure you write these answers by conducting some research and cite both textbook and external credible sources.Part 2:Please answer the following Questions.1. What are the five variables that affect the value of an option, and how do changes in each of these variables affect the value of a call option?2. What does the seller of a put option hope will happen?3. What is the value of a call option or a put option if the stock price is zero? What if the stock price is extremely high (relative to the strike price)?4. List and describe four different types of real options that are associated with investment projects.5. How are options related to the agency costs of debt and equity?Note: Note that each question should be answered in a minimum of 200 words. Be typed, double spaced, using Times New Roman font (size 12), with one inch margins on all sides and heading; citations and references must follow APA format. Include a cover page containing the title of the assignment, the students name, the professors name, the course title, and the date.