We are examining a new project. We expect to sell 5,600 units per year at $70 net cash flow apiece for the next 10 years. In other words, the annual operating cash flow is projected to be $705,600=$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. 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 Intermedlete colculatlons and round your answer to 2 declmal pleces, e.g., 32.16.) b. What is the value of the option to abandon? (Do not round Intermedlete calculetlons and round your answer to 2 declmal pleces, e.g., 32.16.) We are examining a new project. We expect to sell 5,600 units per year at $70 net cash flow apiece for the next 10 years. In other words, the annual operating cash flow is projected to be $705,600=$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. 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 Intermedlete colculatlons and round your answer to 2 declmal pleces, e.g., 32.16.) b. What is the value of the option to abandon? (Do not round Intermedlete calculetlons and round your answer to 2 declmal pleces, e.g., 32.16.)