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Problem 7 - 1 7 Abandonment Value We are examining a new project. We expect to sell 5 , 7 0 0 units per year
Problem Abandonment Value
We are examining a new project. We expect to sell units per year at $ net cash flow apiece for the next years. In other words, the annual operating cash flow is projected to be $times $ The relevant discount rate is percent and the initial investment required is $
a What is the basecase NPVDo not round intermediate calculations and round your answer to decimal places, eg
b After the first year, the project can be dismantled and sold for $ If expected sales are revised based on the first years performance, below what level of expected sales would it make sense to abandon the project? Do not round intermediate calculations and round your answer to the nearest whole number, eg
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