A two-year project costs $100,000. There is a 70% chance that demand will be high in the first year in which case the net cash flow (NCF) will be $100,000 and a 30% chance it will be low in which case the NCF will only be $40,000. If demand is high in the first year there is a 60% chance it will stay high in the second year with NCF of $100,000 and a 40% chance it will be low with NCF of $40,000. If demand is low in the first year, there is a 60% chance it will stay low with NCF 40,000 and a 40% chance it will be high in the second year with NCF $100,000. Assume the opportunity cost of capital is 12%.

1. What is the expected net present value (NPV)?
2. What is the chance of a negative NPV, if any?
3. If the project can be sold to another party at the end of the first year for $70,000, should the firm abandon the project at the end of the first year or go ahead?