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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

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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 14 units per year at $306,000 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 $15.1 million initial investment. The finance department has estimated that a discount rate of 13 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 this first year, the project can be dismantled and will have an aftertox salvage value of $11.1 million. Also, after the first year expected cash flows will be revised up to 19 units per year or down to O 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.) a. Base-case NPV b. Revised NPV $ $ -15,100,000.00 1,254,679.77

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