8) "Cost of Excess Capacity - 1" - ABC Company is evaluating a new project. The new project requires the use of an existing storage room. The storage room has no alternative use for the next 2 years, i.e., it is an excess capacity. ABC has a policy of adding a new storage room every 5 years at a cost of $10,000. Available information indicates that, if the new project is expected to be terminated at any time within 2 years period, anew storage room will not be required until the end of year 4. However, if the new project is expected to last more than 2 years, ABC needs to add a new storage room at the end of year 2 instead of the end of year 4. ABC's cost of capital is 10%. a. Determine the PV of opportunity cost of using the storage room by the new project if this project is expected to be terminated before the end of year2. b. Determine the PV of opportunity cost of using the storage room by the new project if this project is expected to continue for indefinite period in the future. 8) "Cost of Excess Capacity - 1" - ABC Company is evaluating a new project. The new project requires the use of an existing storage room. The storage room has no alternative use for the next 2 years, i.e., it is an excess capacity. ABC has a policy of adding a new storage room every 5 years at a cost of $10,000. Available information indicates that, if the new project is expected to be terminated at any time within 2 years period, anew storage room will not be required until the end of year 4. However, if the new project is expected to last more than 2 years, ABC needs to add a new storage room at the end of year 2 instead of the end of year 4. ABC's cost of capital is 10%. a. Determine the PV of opportunity cost of using the storage room by the new project if this project is expected to be terminated before the end of year2. b. Determine the PV of opportunity cost of using the storage room by the new project if this project is expected to continue for indefinite period in the future