Business, 28.07.2020 19:01 heyrosaphoto3159

B&B has a new baby powder ready to market. If the firm goes directly to the market with the product, there is only a 60 percent chance of success. However, the firm can conduct customer segment research, which will take a year and cost $1.14 million. By going through research, the company will be able to better target potential customers and will increase the probability of success to 75 %. If successful, the baby powder will bring a present value profit (at time of initial selling) of $18.4 million. If unsuccessful, the present value payoff is only $5.4 million. The appropriate discount rate is 14 %. 1. Calculate the NPV for the firm if it conducts customer segment research, and if it goes to market immediately.
NPV
Market immediately $132000
Research option 122894
2. Should the firm conduct customer segment research or go to the market immediately?
A. Market immediately.
B. Conduct research.

Answers: 2

Show answers

Another question on Business

Business, 22.06.2019 21:00

Sue peters is the controller at vroom, a car dealership. dale miller recently has been hired as the bookkeeper. dale wanted to attend a class in excel spreadsheets, so sue temporarily took over dale's duties, including overseeing a fund used for gas purchases before test drives. sue found a shortage in the fund and confronted dale when he returned to work. dale admitted that he occasionally uses the fund to pay for his own gas. sue estimated the shortage at $450. what should sue do?

Answers: 3

Answer

Business, 22.06.2019 21:10

An investor purchases 500 shares of nevada industries common stock for $22.00 per share today. at t = 1 year, this investor receives a $0.42 per share dividend (which is not reinvested) on the 500 shares and purchases an additional 500 shares for $24.75 per share. at t = 2 years, he receives another $0.42 (not reinvested) per share dividend on 1,000 shares and purchases 600 more shares for $31.25 per share. at t = 3 years, he sells 1,000 of the shares for $35.50 per share and the remaining 600 shares at $36.00 per share, but receives no dividends. assuming no commissions or taxes, the money-weighted rate of return received on this investment is closest to:

Answers: 3

Answer

Business, 22.06.2019 21:20

Which of the following best describes the advantage of living in a suburban area? a. suburbs give people access to city jobs along with more living space. b. suburbs give people easy access to cultural attractions and high-paying jobs. c. suburbs have the widest availability of low-cost housing of any living area. d. suburbs have the lowest population density of any living area.

Answers: 1

Answer

Business, 23.06.2019 02:30

Is will able to claim r.j. as a qualifying child for the earned income credit (eic)?

Answers: 1

Answer

You know the right answer?

B&B has a new baby powder ready to market. If the firm goes directly to the market with the prod...

Questions