9044

Investing in a bee keeping business is deemed to have the following cash flows over its
useful life of 5 years. The abandonment value is also provided in a yearly basis
YearCash FlowAbandonment Value0(520,000)520,0001250,000350,0002200,000240,0003150,000150,0004100,00075,000550,0000
Required:
Determine when to abandon the project assuming a discount rate of 10%.