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You are given the following decision tree representing the cash flows for a project conditional probabilities are in parentheses): Year o Year 1 Year 2

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You are given the following decision tree representing the cash flows for a project conditional probabilities are in parentheses): Year o Year 1 Year 2 Year 3 $300 (5) $400 (5) $500 (5) $500 (333) $500 (5) $600 (5) $700 (5) -$400 (5) $500 (5) $600 (5) ($900) $600 (333) $600 (5) $700 (5) $800 (15) $500 (5) ($900) $600 (333) $400 (5) $600 (5) $600 (5) $700 (5) $800 (5) $500 (5) $600 (5) $700 (5) $700 (333) $700 (5) $800 (5) $900 (5) The risk-adjusted discount rate (WACC) for this project is 16 percent. Now, assume that the form has the option to abandon this project at Year 1 (after observing the cash flow in Year 1) and receive $950 of abandonment value at Year 1. Using a discounted cash flow (DCF) approach, determine the net present value of this project when abandonment is considered. Answer in dollars and cents, truncated to the nearest cent, with no punctuation. For example, if vour answer is $1 998 677 enter "1998.67". You are given the following decision tree representing the cash flows for a project conditional probabilities are in parentheses): Year o Year 1 Year 2 Year 3 $300 (5) $400 (5) $500 (5) $500 (333) $500 (5) $600 (5) $700 (5) -$400 (5) $500 (5) $600 (5) ($900) $600 (333) $600 (5) $700 (5) $800 (15) $500 (5) ($900) $600 (333) $400 (5) $600 (5) $600 (5) $700 (5) $800 (5) $500 (5) $600 (5) $700 (5) $700 (333) $700 (5) $800 (5) $900 (5) The risk-adjusted discount rate (WACC) for this project is 16 percent. Now, assume that the form has the option to abandon this project at Year 1 (after observing the cash flow in Year 1) and receive $950 of abandonment value at Year 1. Using a discounted cash flow (DCF) approach, determine the net present value of this project when abandonment is considered. Answer in dollars and cents, truncated to the nearest cent, with no punctuation. For example, if vour answer is $1 998 677 enter "1998.67

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