Woo & Bong Company is considering the introduction of automated stores that can reduce labour costs. If the automated stores do not operate effectively in the first year, Woo & Bong Company can abandon the project. You have determined the following information relevant to the abandonment possibility:

Present value of business without option to abandon = $553

Abandonment value = $500

Risk-free interest rate = 10%

Asset price = $553

u = 1.23 and d = 0.82.

What is the project value? Show all work to receive marks. No marks will be given for answers without justification.