3M is evaluating a new type of adhesive. The initial investment required is $874 million. The company expects to sell 54 million units every year forever, at a net cash flow of $2.83 per unit. Investments with similar risk deliver a rate of return of 18%. Part 1 [ A Attempt 1/10 for 9.2 pts. What is the NPV of the project (in $ million)? Correct Annual cash flows: C=QNCF=542.83=152.82 Since the annual cash flows are constant and occur forever, we can use the perpetuity formula to find their present value: NPV=874+152.82/0.18=25(million) The NPV is negative, making the project unattractive. Part 2 - I Attempt 4/10 for 9.2 pts. In fact, there is a 50% chance that annual sales will hit 81 million units and a 50% chance that they will be 27 million units. The project assets can be sold for $699 million (after taxes) in year 1 . What is the expected NPV of the project if the company can abandon or expand the project after one year (in \$ million)