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Your firm is considering a project with a four-year life and an initial cost of $87,000. The discount rate for the project is 15 percent.
Your firm is considering a project with a four-year life and an initial cost of $87,000. The discount rate for the project is 15 percent. The firm expects to sell 1,800 units a year. The cash flow per unit is $19. The firm will have the option to abandon this project after two years at which time they expect they could sell the project for $40,000. At what level of sales should the firm be willing to abandon this project? A. 1,295 units B. 1,361 units C. 1,540 units D. 1,565 units
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