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

Multiple Choice

Brewster's is considering a project with a life of 5 years,an initial cost of $120,000,and a discount rate of 12 percent.The firm expects to sell 2,100 units a year at a cash flow per unit of $20.The firm will have the option to abandon this project after three years at which time it could sell the project for $50,000.At what level of sales should the firm be willing to abandon this project at the end of the third year?

A) 420 units
B) 1,041 units
C) 1,479 units
D) 1,618 units
E) 2,500 units