Consider the following project for Hand Clapper, Inc. Thecompany is considering a 4-year project to manufacture clap-commandgarage door openers. This project requires an initial investment of$15.7 million that will be depreciated straight-line to zero overthe project’s life. An initial investment in net working capital of$970,000 is required to support spare parts inventory; this cost isfully recoverable whenever the project ends. The company believesit can generate $12.3 million in revenues with $4.8 million inoperating costs. The tax rate is 22 percent and the discount rateis 10 percent. The market value of the equipment over the life ofthe project is as follows:

  

Year	Market Value ($ millions)
1		$	13.70
2			10.70
3			8.20
4			1.55

  

a.	Assuming Hand Clapper operates this project for four years, whatis the NPV? (Do not round intermediate calculations andenter your answer in dollars, not millions of dollars, rounded to 2decimal places, e.g., 1,234,567.89.)

b-1	Compute the project NPV assuming the project is abandoned afteronly one year. (Do not round intermediate calculations andenter your answer in dollars, not millions of dollars, rounded to 2decimal places, e.g., 1,234,567.89.)

b-2	Compute the project NPV assuming the project is abandoned afteronly two years. (Do not round intermediate calculations andenter your answer in dollars, not millions of dollars, rounded to 2decimal places, e.g., 1,234,567.89.)

b-3	Compute the project NPV assuming the project is abandoned afteronly three years. (Do not round intermediate calculationsand enter your answer in dollars, not millions of dollars, roundedto 2 decimal places, e.g., 1,234,567.89.)