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Nataly [62]
3 years ago
14

Ang Electronics, Inc., has developed a new DVDR. If the DVDR is successful, the present value of the payoff (when the product is

brought to market) is $33.5 million. If the DVDR fails, the present value of the payoff is $11.5 million. If the product goes directly to market, there is a 50 percent chance of success. Alternatively, Ang can delay the launch by one year and spend $1.25 million to test market the DVDR. 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.(Enter your answers in dollars, not millions of dollars, i.e. 1,234,567. Do not round intermediate calculations and round your final answers to nearest whole dollar amount. (e.g., 32))
Business
1 answer:
omeli [17]3 years ago
4 0

Answer:

The NPV of going directly to market and the NPV of test marketing before going to market is $22.5 million and  $24.97 million respectively

Explanation:

The computation of the NPV of going directly to market is shown below:

=  Present value of the payoff i.e market × success percentage + Present value of the payoff × failure percentage

= $33.5 million × 50% + $11.5 million × 50%

= $16.75 million + $5.75  billion

= $22.5 million

And, The computation of the NPV of going directly to market is shown below:

=  (Present value of the payoff i.e market × success percentage + Present value of the payoff × failure percentage) ÷ ( 1 + discount rate) - spending amount

= ($33.5 million × 80% + $11.5 million × 20%) ÷ ( 1 + 0.11) - $1.25 million

= ($26.80 million + $2.30  million) ÷ (1.11) -  $1.25 million

= ($29.10 million) ÷ (1.11) -  $1.25 million

= $24.97 million

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MrRa [10]

Answer:

55,060 machines

Explanation:

Projected sales = 54,500

Estimated opening balance = 6,860

Desired ending balance = 7,420

Budgeted production = ?

Let the budgeted production be B

Using the formula

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6,860 + B - 54,500 = 7,420

B = 7,420 + 54,500 - 6,860

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3 years ago
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Question 5 of 20
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When you invest your money, it is likely that in future your purchasing power will A. go up and down.

<h3>What will happen to your purchasing power?</h3>

If you invest your money today, there is a chance that you will get back more money than you deposited, or less than you deposited.

This means that you will either have more money or less money to purchase goods and services. In other words, your purchasing power will go up and down.

Find out more on purchasing power at brainly.com/question/2286004.

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3 years ago
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