Question
Allied Products, Inc., is considering a new product launch. The firm expects to have annual operating cash flow of $8.8 million for the next 8
Allied Products, Inc., is considering a new product launch. The firm expects to have annual operating cash flow of $8.8 million for the next 8 years. Allied Products uses a discount rate of 12 percent for new product launches. The initial investment is $38.8 million. Assume that the project has no salvage value at the end of its economic life.
a. | What is the NPV of the new product? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Round your answer to 2 decimal places, e.g., 32.16.) NPV= $_________
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