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Ang Electronics, Inc., has developed a new HD DVD . If the HD DVD is successful, the present value of the payoff ( at the
Ang Electronics, Inc., has developed a new HD DVD If the HD DVD is successful, the present value of the payoff at the time the product is brought to market is $ million. If the HD DVD fails, the present value of the payoff is $ million. If the product goes directly to market, there is a percent chance of success. Alternatively, the company can delay the launch by one year and spend $ million to testmarket the HD DVD Testmarketing would allow the firm to improve the product and increase the probability of success to percent. The appropriate discount rate is percent.
Calculate the NPV of going directly to market and the NPV of testmarketing before going to market. Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to nearest whole dollar amount, eg
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