answer the blank box question

value: 2.00 polnts Problem 10-29 Expansion Option (L04) Hit or Miss Sports is introducing a new product this year. If its seeatnight soccer balls are a hit, the rm expects to be able to sell 4?,400 units a year at a price of $64 each. If the new product is a bust, only 27,600 units can be sold at a price of $41. The variable cost of each ball is $25 and xed costs are zero. The cost of the manufactun'ng equipment is $5.03 million, and the project life is estimated at 12 years. The rm will use straightline depreciation over the 12year life of the project. The rm's tax rate is 35% and the discount rate is 11 %. Now suppose that Hit or Miss Sports can expand production if the project is successful. By paying its workers overtime, it can increase production by 22,000 units; the variable cost of each ball will be higher, equal to $31 per unit. Ely how much does this option to expand production inCIease the NPV of the project? Assume that the rm decides whether to expand production after it learns the rstyear sales results. (Round your answer to the nearest dollar. Use annuity factor value rounded to 4 decimal places in your calculations.) References