The manufacture of polysyllabic acid is a competitive industry. Most plants have an annual output of 220,000 tons. Operating costs are $1.02 a ton, and the sales price is $1.12 a ton. A 220,000-ton plant costs $220,000 and has an indefinite life. Its current scrap value of $128,000 is expected to decline to $125,900 over the next two years. Phlogiston Inc. proposes to invest $220,000 in a plant that employs a new low-cost process to manufacture polysyllabic acid. The plant has the same capacity as existing units, but operating costs are $0.97 a ton. Phlogiston estimates that it has two years lead over each of its rivals in use of the process but is unable to build any more plants itself before year 2. Also, it believes that demand over the next two years is likely to be sluggish and that its new plant will therefore cause temporary overcapacity. You can assume that there are no taxes and that the cost of capital is 10%.

a. What does that imply for the price of polysyllabic acid in year 3 and beyond? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. What would be the NPV of Phlogistons venture? (Do not round intermediate calculations. Round your answer to the nearest whole dollar number.)