Intro 3M is evaluating a new type of adhesive. The initial investment required is $479 million. The company expects to sell 23 million units every year forever, at a net cash flow of $2.83 per unit. Investments with similar risk deliver a rate of return of 14%. Part 1 Attempt 1/10 for 10 pts. What is the NPV of the project (in $ million)? Correct Annual cash flows: C=QNCF=232.83=65.09 Since the annual cash flows are constant and occur forever, we can use the perpetuity formula to find their present value: NPV=479+65.09/0.14=14.07 (million) The NPV is negative, making the project unattractive. Part 2 Attempt 3/10 for 10 pts. In fact, there is a 50% chance that annual sales will hit 34.5 million units and a 50% chance that they will be 11.5 million units. The project assets can be sold for $383 million (after taxes) in year 1 . What is the expected NPV of the project if the company can abandon or expand the project after one year (in \$ million)