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Marguerite is reviewing a project with projected sales of 1,400 units a year, a cash flow of $39 a unit and a 3-year project life.
Marguerite is reviewing a project with projected sales of 1,400 units a year, a cash flow of $39 a unit and a 3-year project life. The initial cost of the project is $94,000. The relevant discount rate is 14 percent. Marguerite has the option to abandon the project after one year at which time she feels she could sell the project for $63,000. At what quantity of sales per year should she be willing to abandon the project after the first year? Select one: a. 899 units b. 981 units c. 967 units d. 1,199 units e. 1,006 units
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