Go to the “live” Excel spreadsheets versions of Tables 11.1–11.3 at www.mhhe.com/bma.

Reevaluate the NPV of the proposed polyzone project under each of the following assumptions.

What’s the right management decision in each case?

a. Spread in year 4 holds at $1.20 per pound.

b. The U.S. chemical company can start up polyzone production at 40 million pounds in year 1 rather than year 2.

c. The U.S. company makes a technological advance that reduces its annual production costs to $25 million. Competitors’ production costs do not change.

AppendixLO1