Question
8. A firm has estimated the NPV of a new product release as -$100,000. However, if the product is a failure, the firm estimates it
8. A firm has estimated the NPV of a new product release as -$100,000. However, if the product is a failure, the firm estimates it can sell off the equipment to help cash flow. An analyst estimates the value of abandoning the product release at $125,000. The cost of capital for the firm is 10%. What is the project value for the firm?
| a. | -$100,000 |
| b. | $10,000 |
| c. | $25,000 |
| d. | $225,000 |
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Financial Markets And Institutions
Authors: Anthony Saunders, Marcia Millon Cornett
1st International Edition
0071181334, 9780071181334
