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Ang Electronics, Incorporated, has developed a new mesh network. If successful, the present value of the payoff ( when the product is brought to market
Ang Electronics, Incorporated, has developed a new mesh network. If successful, the present value of the payoff when the product is brought to market is $ million. If the mesh network falls, the present value of the payoff is $ million. If the product goes directly to market, there is a percent chance of success. Altematively, the company can delay the launch by one year and spend $ milion to test market the mesh network. Test marketing would allow the firm to improve the product and increase the probability of success to percent. The appropriate discount rate is percenL Calculate the NPV of going directly to market and the NPV of test marketing before going to market. Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to the nearest whole number, eg
Answer is complete but not entirely correct.
tableGo to market now,$
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