What is the npv of going directly to market

Assignment Help Financial Management

Reference no: EM131873235

Osceola Electronics, Inc., has developed a new HD DVD. If the HD DVD is successful, the present value of the payoff (at the time the product is brought to market) is $31.9 million. If the HD DVD fails, the present value of the payoff is $6.4 million. If the product goes directly to market, there is a 60 percent chance of success. Alternatively, Osceola can delay the launch by one year and spend $1.46 million to test-market the HD DVD. Test-marketing would allow the firm to improve the product and increase the probability of success to 80%. The appropriate discount rate is 10%.

What is the NPV of going directly to market? (Round answer to 2 decimal places. Do not round intermediate calculations)

Reference no: EM131873235

Questions Cloud

What is the value of the movie : The cost of capital for the movie is 20.4 percent per year. What is the value of the movie?

Explain the advantages of each type of branding strategy : How should a company decide whether Individual or Family branding is best for a given product? What are some advantages/disadvantages of each type of branding.

What is the npv of test-marketing before going to market : What is the NPV of test-marketing before going to market?

Make his first savings contribution : Caruso is planning to save 2,683.27 dollars every quarter for 12 years. He plans to make his first savings contribution in 3 months from today.

What is the npv of going directly to market : What is the NPV of going directly to market?

Company is deciding whether to invest in new machine : Your company is deciding whether to invest in a new machine. What is the NPV if the company decides to wait 2 years to purchases the machine?

Write code to accept numbers from the user : Errors occur in programs, and there are two ways to address the problems. The first is to try to write code that checks for errors and then deals with them.

Make annual scholarship payments forever : Imari wants to establish a charitable foundation that will make annual scholarship payments forever.

Variable cost per unit projection : what is the sensitivity of OCF to changes in the variable cost per unit projection?

User Account

All Pages