We are examining a new project We expect to sell 6,300 units per year at $57 net cash flow apiece for the next 10 years In other words, the annual operating cash flow is projected to be $576,300 $359,100 The relevant discount rate is 12 percent and the initial investment required is $1,740,000 a What is the base case NPV (Do not round intermediate calculations and round your answer to 2 decimal places, e g , 32 16 ) b After the first year, the project can be dismantled and sold for $1,610,000 If expected sales are revised based on the first year's performance, below what level of expected sales would it make sense to abandon the project (Do not round intermediate calculations and round your answer to the nearest whole number, e g , 32 )

Question

We are examining a new project  We expect to sell 6,300 units per year at $57 net cash flow apiece for the next 10 years  In other words, the annual operating cash flow is projected to be $576,300 $359,100  The relevant discount rate is 12 percent and the initial investment required is $1,740,000  a  What is the base case NPV  (Do not round intermediate calculations and round your answer to 2 decimal places, e g , 32 16 ) b  After the first year, the project can be dismantled and sold for $1,610,000  If expected sales are revised based on the first year's performance, below what level of expected sales would it make sense to abandon the project  (Do not round intermediate calculations and round your answer to the nearest whole number, e g , 32 )

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We are examining a new project. We expect to sell 6,300 units per year at $57 net cash flow apiece for the next 10 years.

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