Herjavec Enterprises is thinking about introducing a new surface cleaning machine The marketing department has come up with the estimate that the company can sell 15 units per year at $308,000 net cash flow per unit for the next five years The engineering department has come up with the estimate that developing the machine will take a $15 2 million initial investment The finance department has estimated that a discount rate of 16 percent should be used a What is the base case NPV (A negative answer should be indicated by a minus sign Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e g , 1,234,567 89 ) b If unsuccessful, after the first year, the project can be dismantled and will have an aftertax salvage value of $11 3 million Also, after the first year expected cash flows will be revised up to 20 units per year or down to 0 units with equal probability What is the revised NPV (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e g , 1,234,567 89 )

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Herjavec Enterprises is thinking about introducing a new surface cleaning machine. The marketing department has come up with the estimate that the company can sell

Herjavec Enterprises is thinking about introducing a new surface cleaning machine. The marketing department has come up with the estimate that the company can sell 15 units per year at $308,000 net cash flow per unit for the next five years. The engineering department has come up with the estimate that developing the machine will take a $15.2 million initial investment. The finance department has estimated that a discount rate of 16 percent should be used.

a.	What is the base-case NPV? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.)

If unsuccessful, after the first year, the project can be dismantled and will have an aftertax salvage value of $11.3 million. Also, after the first year expected cash flows will be revised up to 20 units per year or down to 0 units with equal probability. What is the revised NPV? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.)