Consider the following information given below:

($ in millions except as noted)Year 0Year 1Year 2Year 3Year 4Year 5-10Investment100Required rate of return10%Production (millions of pounds per year)0046929292Spread ($ per pound)1.261.261.261.261.161.01Production costs0036363636Transport0010888Other costs02626262626

Production and transport costs are variable costs while other costs are fixed.

a-1.Calculate the NPV of the proposed polyzone project, if the spread in year 4 holds at $1.26 per pound.(Do not round intermediate calculations. A negative answer should be indicated by a minus sign. Round your answer to 1 decimal place.)

Net present value$

a-2.Whats the right management decision?

The project is acceptable.The project is not acceptable.

b-1.Calculate the NPV of the proposed polyzone project, if the U.S. chemical company can start up polyzone production at 46 million pounds in year 1 rather than year 2.(Do not round intermediate calculations. Round your answer to 1 decimal place.)

Net present value$

b-2.Whats the right management decision?

The project is acceptable.The project is not acceptable.

c-1.Calculate the NPV of the proposed polyzone project, if the U.S. company makes a technological advance that reduces its annual production costs to $31 million. Competitors production costs do not change.(Do not round intermediate calculations. Round your answer to 2 decimal places.)

Net present value$

c-2.Whats the right management decision?

The project is acceptable.The project is not acceptable.