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# Allied Products, Inc., is considering a new product launch. The firm expects to have annual operating cash flow of $9 million for the next 8 years.

Allied Products, Inc., is considering a new product launch. The firm expects to have annual operating cash flow of $9 million for the next 8 years. Allied Products uses a discount rate of 14 percent for new product launches. The initial investment is $39 million. Assume that the project has no salvage value at the end of its economic life.

**a.**What is the NPV of the new product? **(Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Round your answer to 2 decimal places, e.g., 32.16.)**

NPV$

**b.**After the first year, the project can be dismantled and sold for $26 million. If the estimates of remaining cash flows are revised based on the first year's experience, at what level of expected cash flows does it make sense to abandon the project?