QuickHelper

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About QuickHelper

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Teaching Since: May 2017
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Education

  • MBA, PHD
    Phoniex
    Jul-2007 - Jun-2012

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  • Corportae Manager
    ChevronTexaco Corporation
    Feb-2009 - Nov-2016

Category > Business & Finance Posted 07 Jun 2017 My Price 6.00

Corporate Finance

Question description

 

 

 

 

The manager for a growing firm is considering the launch of a new product. If the product goes directly to market, there is a 50 percent chance of success. For $167,000, the manager can conduct a focus group that will increase the product’s chance of success to 65 percent. Alternatively, the manager has the option to pay a consulting firm $382,000 to research the market and refine the product. The consulting firm successfully launches new products 80 percent of the time. If the firm successfully launches the product, the payoff will be $1.82 million. If the product is a failure, the NPV is zero.


 

Calculate the NPV for each option available for the project. (Do not round intermediate calculations. Enter your answers in dollars, not millions of dollars (e.g. 1,234,567).) 


 

 

 

 NPV

 Go to market now

$ 

 Focus group

$ 

 Consulting firm

$ 

Answers

(10)
Status NEW Posted 07 Jun 2017 10:06 AM My Price 6.00

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