2)

Your company is examining a new project. It expects to sell 5,800 units per year at $72 net cash flow aplece for the next 10 years. In other words, the annual operating cash flow is projected to be $725,800=$417,600. The relevant discount rate is 15 percent, and the initial investment required is $1,690,000. (Do not round intermediate calculations.) a. What is the base-case NPV? (Round the final answer to 2 decimal places. Omit $ sign in your response.) NPV $ b. At the end of the first year, the project can be dismantled and sold for $1,520,000. If expected sales are revised based on the first year's performance, below what level of expected sales would it make sense to abandon the project? (Round the final answer to the nearest whole number.) Level of expected sales units