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The Event center recently purchased a used limo. The limo cost $22,500 and is expected to generate after tax cash flows, including depreciation of $6,250

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The Event center recently purchased a used limo. The limo cost $22,500 and is expected to generate after tax cash flows, including depreciation of $6,250 per year. The limo has an expected 5 year life. The expected and year-end values (salvage) are below. The WACC for this projects is 10% Yr 0 ($22,500); Yr 1 inflow $6,250, abandonment value $17,500; yr 2 inflow $6,250, abandonment value $14,000; yr 3 inflow $6,250, abandonment value $11,000; yr 4 Inflow $6,250, abandonment value $5,000 and yr 5 inflow $6,250, abandonment value o What is the NPV if the company does not consider real options? What is the project's NPV with each of the abandonment options? What is the value of the choice abandonment option? What are the projects IRRs? Would you recommend abandonment at any time with this project

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