T. Chin starts a business. Before he starts to sell anything, he buys fixtures at $2,000, a motor vehicle for $5,000 and stock of goods for $3,500. Although he has paid in full for the fixtures and the motor vehicle, he still owes $1,400 for some of the goods. J. Preston had lent Chin $3,000. Chin, after the above, has $2,800 in the business bank account and $100 cash in hand. You are required to calculate his capital.

Brandt enterprises is considering a new project that has a cost of $1,000,000, and the cfo set up the following simple decision tree to show its three most likely scenarios. the firm could arrange with its work force and suppliers to cease operations at the end of year 1 should it choose to do so, but to obtain this abandonment option, it would have to make a payment to those parties. how much is the option to abandon worth to the firm?