Question
14. (assuming the required rate of return is still 10%). To increase the chance of success of the new Xbox, Microsoft decides to spend approximately
14. (assuming the required rate of return is still 10%). To increase the chance of success of the new Xbox, Microsoft decides to spend approximately $300 million right now to buy some game studios with best selling games to make them exclusive to the new Xbox. This plan is expected to increase the success outcome probability of the new Xbox to 60%. With this new plan included, should Microsoft decide to proceed with the production of the new Xbox? * Following Question 14, what is the updated NPV of the new Xbox project, with the new plan included?
Your answer:_________
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