(35 marks) Question 12 Dunkin Donuts is considering a new breakfast Sandwich to add to their menu. The project requires an initial capital investment of $110,000 per franchisee and will generate an expected cash flow of $12,000 per year forever. Consumer acceptance, however, is uncertain. The firm believes the product "newness" will generate the first year's cash flow. At the end of the first year, however the firm will have a better understanding of consumer demand. If demand is high, the sandwich will generate $14,500 per year. But there is a 20% chance that demand will be low, in which case the cash flow will be $2,000 per year. At the first year, the firm could terminate the project and sell the assets for $82,500. The discount rate is 12%. What is the NPV of the project taking into account the option to abandon? (15 marks)