Despite its promoting technology

Assignment Help Financial Management

Reference no: EM131587324

Neptune Biometrics, despite its promoting technology, is having difficulty generating profits. Having raised $85 million in an initial public offering of its stock early in the year, the company is poised to introduce a new product, an inexpensive fingerprint door lock. If Neptune engages in a promotional campaign costing $55 million this year, its annual after-tax cash flow over the five years will be only $1 million. If it does not undertake the campaign, it expects its after-tax cash flow to be -$15 million annually for the same period. Assuming the company has decided to stay in its chosen business, is this campaign worthwhile when the discount rate is 8 percent? Why or why not? Please show your work.

Reference no: EM131587324

Questions Cloud

Some customers previously considered poor risks : Deft Electronics is considering extending trade credit to some customers previously considered poor risks. Compute the incremental income after taxes.

Discuss affine toric variety : (Veronese variety) Let d be a positive integer and let A be the set of k-partitions of d consisting of all a ? Nk such that |a| = d.

How many life vests must lakeview corporation produce : At the beginning of the year, Lakeview Corporation has 640 life vests in inventory. How many life vests must Lakeview Corporation produce during the year

Describe the speed and endurance of the players : Describe the speed and endurance of the players. Describe the strengths and weaknesses of groundstrokes, serve, return, volley, and overhead.

Despite its promoting technology : Neptune Biometrics, despite its promoting technology, is having difficulty generating profits.

Design a class named fan to represent a fan : Design a class named Fan to represent a fan - A private boolean data field named onOff that specifies whether the fan

How does spoofing threaten an e-commerce : 1. How does spoofing threaten an e-commerce site's operations?

How mobile technology is changing the practice of business : Discuss how mobile technology is changing the practice of business communication. Explain how the widespread use of social media has increased the attention.

What is the after-tax cost of debt : Tiny Tots has debt outstanding, currently selling for $860 per bond. What is the after-tax cost of debt?

User Account

All Pages