Your firm is considering a project with a five-year life and an initial cost of $120,000. The discount rate for the project is 12%. The firm expects to sell 2,100 units a year. The cash flow per unit is RM20. The firm will have the option to abandon this project affer three years at which time it expects it could sell the project for RMS0,000. You are interested in knowing how the project will perform if the sales forecasts for years four and five of the project are revised such that there is a 50% chance that the sales will be either 1,400 or 2,500 units a year. i) What is the net present value of this project given your sales forecasts? (7 marks) ii) The NPV technique doesn't always give the right answer when an investment has an embedded real option. Describe what are real options, how the NPV may not give the right answer when real options exist, and how can a firm incorporates these into their capital budgeting decisions