Abandonment. Henteleff, Inc. is considering a project with the following data:
|
Year
|
Initial Investment
and Net Cash Flow
|
Abandonment
Value in Year t
|
|
0
|
($8,000)
|
$8,000
|
|
1
|
4,000
|
4,500
|
|
2
|
4,000
|
3,000
|
|
3
|
4,000
|
0
|
The firm's cost of capital is 10 percent. What should the company do?