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General Forge and Foundry Co. is considering a three year project that will require an initial investment of $44,000. If market demand is strong, General

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General Forge and Foundry Co. is considering a three year project that will require an initial investment of $44,000. If market demand is strong, General Forge and Foundry Co. thinks that the project will generate cash flows of $28,000 per year. Hewever, if market demand. is weak, the company belleves that the project will generate cash flows of only $1,500 per year. The company thinks that thete is a 504 . chance that demand will be strong-and a 50% chance that demand will be weak, If the compacy uses a project cost of capital of 10\%, whot will be the expected net present value (NPY) of this project? (Note: Do not round intermedlate calculations and round your answer to the nearest whole dollar) $8,783= 57,319 57,685 56,221 Genoral forge and Foundry 50 , has the option to delay starting this project for one year so that analysts can gather more intormation about whether demand will be strong or weok. If the company chooses to delay the project, it will hove to give up a year of cash flows, because the profect will then be only a two-year project. However, the company will know for ceetain if the market demand will be strong or weak before deciding to invest in it. What will be the expected NPV if General Forge and Foundry Co, delays starting the project? (Note: Do not round intermediate calculations and round your answer to the nearest whole dollar.) General Forge and Foundry Co. has the option to delay starting this profect for one year so that analysts ean oather more information about whether demand will be strong or weak. If the company chooses to detay the project, it will have to give up a year of cash flows, because the project will then be only a two year project. However, the company will know for certain if the market derrand will bet strong or weak before -deciding to invest in a is What will be the expected NFV If General Forge and Foundry Co. delays starting the project? (Note: Do not round intermediate calculations and round your answer to the nearest whole dollar.) 52,089 52,507 59,408 $1,880 What is the value of Genezal foroe and Foundry Co.'s eption to delay the start of the project? (Wote: Do not round intermediate calculacions and round your answer to the nearest whole doliar.) 52,507 \$1, 1960 59.400 $2.069

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