Conducting a perpetual project with an initial cost of $1,000,000. the project is expected to generate $100,000 in cash flows. the firm will have the option to abandon the project after 1 year at which time it expects to be able to revise it's future cash flow projections to either $150,000 or $50,000 per year. if cold stone decides to abandon after 1 year, it could sell the project for $720,000. the discount rate is 10%. what is the npv of this project taking into account the option to abandon?

 

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To calculate the NPV of the project considering the option to abandon we need t... View the full answer