You have an option to purchase all of the assets of the Overland Railroad for $2.5 billion. The option expires in nine months. You estimate Overland’s current (month 0) present value (PV) as $2.7 billion. Overland generates after-tax free cash flow (FCF) of $50 million at the end of each quarter (i.e., at the end of each three-month period). If you exercise your option at the start of the quarter, that quarter’s cash flow is paid out to you. If you do not exercise, the cash flow goes to Overland’s current owners. In each quarter, Overland’s PV either increases by 10% or decreases by 9.09%. This PV includes the quarterly FCF of $50 million. After the $50 million is paid out, PV drops by $50 million. Thus, the binomial tree for the first quarter is (figures in millions):The risk-free interest rate is 2% per quarter. Build a binomial tree for Overland, with one up or down change for each three-month period (three steps to cover your nine-month option). Suppose you can only exercise your option now, or after nine months (not at month 3 or 6). Would you exercise now? Suppose you can exercise now, or at month 3, 6, or 9. What is your option worth today? Should you exercise today, or wait?

Analyze 1 of the following government intervention programs:Countercyclical fiscal policies (countering economic disruptions such as the housing bubble and the Great Recession)US agriculture support programsAssistance for Low Income Families (choose 1)Housing vouchersEarned Income Tax Credit (including Child Tax Credit)Supplemental Nutrition Assistance Program (SNAP)Low income healthcare (choose 1)Medicaid (including Children's Health Insurance Program).Affordable Care Act expansionSocial insurance programs (choose 1)Old Age, Survivors, and Disability Insurance (OASDI)MedicareUnemployment insuranceWrite a 700- to 1,050-word summary of your analysis. Identify the intervention and the market failure leading up to the intervention. Complete the following in your paper:Analyze the arguments for government intervention as opposed to arguments for market-based solutions.Hint:See the information about market failures.Examine who has been helped and who has been hurt by the selected government intervention.Examine externalities and unintended consequences of such intervention. For example, consider whether the SNAP program and health coverage for low-income families result in higher future tax revenues because low-income children grow up healthier and produce higher incomes over their lifetimes.Analyze whether cost of the intervention you selected as a share of GDP or the number of participants is increasing,decreasing, or varies with the state of the economy, based on the cost trend(or number of participants) since its inception or since 2000.Analyze credible economists’ opinions on the success or failure of the intervention that you chose in achieving its objectives.Recommend whether the program should be continued as is, discontinued, or modified based on your conclusions. Defend your recommendation.Note: Use of charts and graphs is encouraged with appropriate citations. Any charts or graphs retrieved from the Federal Reserve Bank of St. Louis FRED website may only be included when the data sources used by FRED are US government sources such as the Bureau of Economic Analysis or the Bureau of Labor Statistics. Cite at least 2 academically credible sources. Format your assignment according to APA guidelines