Problem $11-17$ Economic rents

Consider the following information given below:

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

a$.$ Calculate the NPV of the proposed polyzone project, if the spread in year $4$ holds at $$1\mathrm{.}34$ per pound and what's the right

management decision?

b$.$ Calculate the NPV of the proposed polyzone project, if the U$.$S$.$ chemical company can start up polyzone production at $54$ million

pounds in year $1$ rather than year $2$ and what's the right management decision?

c$.$ Calculate the NPV of the proposed polyzone project, if the U$.$S$.$ company makes a technological advance that reduces its annual

production costs to $$39$ million. Competitors' production costs do not change and what's the right management decision?