Nelson Manufacturing is considering a project which would require a $6.2 million investment today (t = 0). The after-tax cash flows the factory generates will depend on whether the state imposes a new property tax. There is a 50-50 chance that the tax will pass. If the tax passes, the factory will produce after-tax cash flows of $1,000,000 at the end of each of the next 5 years. If the tax does not pass, the factory will produce after-tax cash flows of $2,000,000 for the next 5 years. The project has a WACC of 12%. If the factory is unsuccessful, the firm will have the option to abandon the project 1 year from now if the tax passes. If the factory project is abandoned, the firm will receive the expected $1 million cash flow at t = 1, and the property will be sold netting $6 million (after taxes are considered) at t = 1. Once the project is abandoned, the company would no longer receive any cash inflows from it. What is the project's expected NPV if it can be abandoned?
a. $486,524
b. $509,831
c. $529,776
d. $537,098
e. $541,234