These values have been given and are incorrect: NPV= 211681.83; 463356.80; 2823355.72; 1542658.28; 2236678.86,; 250419.14; and 520,328.57. Option value: 4216; 1097630; 46670.31; and 168156.79

We are examining next 10 years. In other words, the annual operating cash flow is projected to be S70 x 5,600$392,000 The relevant discount rate is 18 percent, and the initial investment required is $1,550,000. After the first year, the project can be dismantled and sold for $1,270,000. Suppose you think it is likely that expected sales will be revised upward to 8,600 units if the first year is a success and revised downward to 4,200 units if the first year is not a success. project. We expect to sell 5,600 units per year at $70 net cash flow apiece for the a new a. If success and failure are equally likely, what is the NPV of the project? Consider the possibility of abandonment in answering. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV b. What is the value of the option to abandon? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Option value References eBook & Resources