FINANCE-We are examining a new project we expect to sell 7000 units per year

We are examining a new project we expect to sell 7000 units per year at $60 net cash flow apiece for the next 10 years, in other words the annual operating cashflow is projected to be $60X7000=$420,000. The relevant discount rate is %16, and the initial investment required is $1,800,000.a) what is the base case NPV?b) after the first year, the project can be dismantled and sold for $1,400,000 if expected sales are revised based on the first years performance, when will it make sense to abandon the investment? in other words, at what level of expected sales will it make sense to abandon the project?c) Explain how the $1,400,000 abandonment value can be viewed as the opportunity cost of keeping the project in 1 year.d) Suppose you think it is likely that expected sales will be revised upward to 9000 units if the first year is a success and revised downward to 4000 units if the first year is not a success. If success and failure are equally likely, what is the NPV of the project ? Consider success. If success and failure are equally likely, what is the NPV of the project? Consider the possibility of abandonment in answering. What is the value of the option to abandon?e) In the previous problems, suppose the scale of the project can be doubled in one year in the sense that twice as many units can be produced and sold. Naturally, expansion would be desirable only if the project were a success. This implies that if the project is a success, projected sales after expansion will be 18000. Again assuming that success and failure are equally likely, what is the NPV of the project? Note that abandonment is still an option if the project is a failure. What is the value of the option to expand?How to do question e?