Rizzo's Is Considering a Project with a Life of 5

Multiple Choice

Rizzo's is considering a project with a life of 5 years and an initial cost of $131,000.The discount rate for the project is 14 percent.The firm expects to sell 2,100 units a year.The cash flow per unit is $23.The firm will have the option to abandon this project after 3 years at which time it expects it could sell the project for $49,000.At what level of sales should the firm be willing to abandon this project?

A) 1,087 units
B) 1,294 units
C) 1,479 units
D) 1,619 units
E) 1,502 units