We are examining a new project. We expect to sell $5,700$ units per year at $$71$ net cash

flow apiece for the next $10$ years. In other words, the annual operating cash flow is

projected to be $$715,700=$$$404,700.$ The relevant discount rate is $15$ percent, and the

initial investment required is $$1,680,000.$ After the first year, the project can be

dismantled and sold for $$1,500,000.$ Suppose you think it is likely that expected sales

will be revised upward to $8,700$ units if the first year is a success and revised downward

to $4,300$ 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 intermediate calculations

and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

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$.,32\mathrm{.}16.)$