12. Wild Corn, Inc., is considering building an ethanol plant. If economic conditions are favorable, the present value of future cash flows from operating the plant will be $3,500,000. If economic conditions are not favorable, the present value of future cash flows from operating the plant will be $(5,000,000). Wild Corn could suspend operations until economic conditions become favorable in the future, which would result in future cash flows with a present value of $(500,000). If the plant is abandoned, the firm would have to pay for disposal of equipment; the present value of this cost is $700,000.

Determine which decision the firm will make if economic conditions are favorable and if economic conditions are not favorable.