Use the following information to answer 1-6.

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The Manufacturing Company, INC. (MC) is considering performing a feasibility study for a new product available from one of its foreign suppliers. Because MC will have to make an investment of $50 million in order to obtain exclusive U.S. marketing rights to the product, the firm is contemplating performing a feasibility study of the product's market potential. The cost of the study, which will take two years to complete, is an upfront fee of $2 million. Included in this cost is an exclusive option that gives MC two years in which to make the decision to pay the foreign supplier the $50 million. MC's preliminary estimates indicate that there is a:

-50 percent chance of strong product demand, which will result in cash inflows of $13 million per year for 8 years. The first cash flow occurs in year 3.

-20 percent chance of moderate product demand, which will result in cash inflows of $12 million per year for 8 years. The first cash flow occurs in year 3.

-30 percent chance of weak demand, which will result in cash inflows of $7 million per year for 8 years. The first cash inflow occurs in year 3.

After MC sees the results of the feasibility study, it will decide whether to invest the $50 million or not MC's cost of capital applicable to the proposed new product decision is 13. 5 percent.

1. Ignoring the cost of the $2 million study, estimate the NPV of strong product demand in year 2:
2. Ignoring the cost of the study, estimate the NPV of moderate product demand in year 2:
3. ignoring the cost of the study, estimate the NPV of weak product demand in year 2:
4. Find the dynamic NPV of performing the $2 million feasibility study
5. Find the static NPV of performing the $2 million feasibility study
6. Find the value of the option to abandon.