Calculate the npv of going directly to market

Assignment Help Financial Accounting

Reference no: EM133375374

Question: Ang Electronics, Incorporated, has developed a new mesh network. If successful, the present value of the payoff (when the product is brought to market) is $33.2 million. If the mesh network fails, the present value of the payoff is $11.2 million. If the product goes directly to market, there is a 50 percent chance of success. Alternatively, the company can delay the launch by one year and spend $1.22 million to test market the mesh network. Test marketing would allow the firm to improve the product and increase the probability of success to 80 percent. The appropriate discount rate is 11 percent. Calculate the NPV of going directly to market and the NPV of test marketing before going to market.

Reference no: EM133375374

Questions Cloud

What is the nature of the proposed service : What is the identified need? What is the nature of the proposed service? Who is the beneficiary of the project? What is the estimated social impact/outcome?

Create a product liability : Create three (3) questions for incorporation into a "Product Liability" questionnaire for use with prospective clients considering this type of claim.

Determine the risk premium on net?ix common stock : Determine the risk premium on Net?ix common stock. Determine the required return that Net'flix common stock should provide.Determine Netflix's cost of common

What kind of business relationship are you trying to build : What interpersonal factors are at work: What is your reader's perspective? What does your reader need? What business factors are at work: What kind of business

Calculate the npv of going directly to market : The appropriate discount rate is 11 percent. Calculate the NPV of going directly to market and the NPV of test marketing before going to market.

Difference between behavior rating scales-behavior checklist : Differences between behavior rating scales and behavior checklists. What is considered to be the major advantage of using rating scales instead of checklists?

Define the term internal working model : Define the term "internal working model". Which theorist came up with this concept, and how is it significant for infants' development later in life?

Benefits of agreeing to the proposals : Read the scenario below and think about the proposed ideas. Then list the benefits of agreeing to the proposals.

List some components of understanding the client business : List some components of understanding the client's business and industry For each components of understanding the client's businessand industry, providespecific

User Account

All Pages