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Odua Investment Company is thinking about introducing a new surface cleaning machine. The marketing department has estimated that the company cn sell 20 units per

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Odua Investment Company is thinking about introducing a new surface cleaning machine. The marketing department has estimated that the company cn sell 20 units per year at $195,000 net cash flow per unit for the next five years. The engineering department estimated it will cost $14.5 million to install the machine. The finance department estimated the required return for similar projects is 11%. A. Calculate the base-case NPV for the project. 10 points. B. If unsuccessful, after the first year, the project can be dismantled and will have an aftertax salvage value of $10.4 million. Also, after the first year, expected units sold will be revised up to 30 units per year or down to zero units with equal probability. What is the revised NPV? 10 points

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