Boston Distillery is considering producing a line of craft beer. The project would have an initial cost of $454,165 to be paid immediately. Cash flows are estimated to be $64,712 at the end of each semiannual period for 9 years. The distillery has the option to shut down the project after 9 years or update equipment and continue production. the update would cost $844,278 at the end of year 9. However, with this option, the project cash flows would increase by $17,058 (the total cash flow for this option would be $64,712+[$cf2]) per semiannual period for an additional 15 years starting one semiannual period after they pay for the update. Compute the NPV for both options and make your recommendation Assume the cost of capital for Boston Distillery is 12.13%.

Notes:

1. Record the NPV of your recommended project as your answer or if you do not recommend either project, record a zero

2. The second option cannot be pursued if the project is not initially accepted.