1.The initial outlay is 200000. Project life is 4 years. Annual after-tax operating cash flows have a 65 percent probability of being 40000 for the four years and a 35 percent probability of being 85000. Salvage value at project termination is 0. The required rate of return is 10 percent. In 1 year, after realizing the first-year cash flow, the company has the option to abandon the project and receive the salvage value of 250000. If without the abandonment option, will you accept the project or not? What is the optimal abandonment strategy? Compute the project NPV using that strategy.