traditional NPV methodology, she found the project unacceptable because:

$NP{V}_{\text{t}\text{r}\text{a}\text{d}\text{i}\text{t}\text{i}\text{o}\text{n}\text{a}\text{l}}=-$$$1,138<mn\; id="EditorElement\_1204265">0</mn>$

Option $1$: Abandonment$-$The project could be abandoned at the end of $3$ years, resulting in an addition to NPV of $$1,090.$

has an NPV of $$9,300.$

project would affect timing.

b$.$ On the basis of your findings in part $($a$),$ what action should Jenny recommend to management with regard to the proposed equipment expenditure?

c$.$ In general, how does this problem demonstrate the importance of considering real options when making capital budgeting decisions?

a$.$ The value of the real options is $$,.($Round to the nearest dollar.$)$