Question

In 1-year the number of units sold will be revised either upward by 8,700 or downward by
4,300 with equal probability.
The initial values are as follows:
Net cash flow
per
unit
No. of units sold
Initial investment
Life of project
Discount rate
Scrape value in year-1
$71
5.700
$1,680,000
10
15%
$1.500.000
Find the present value of option to abandon.
(A) $18,798
(B) $17,798
(C) $18.978
(D) SI8.978​

Answer 1

Answer:

the present value will be 18978 $

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