Question
Assume that a manufacturing company has been approached by an inventor of a new and improved three person Snuggie. The inventor has the patent rights
Assume that a manufacturing company has been approached by an inventor of a new and improved three person Snuggie. The inventor has the patent rights for the next 5 years. While the product shows promise, it is still very expensive to manufacture and has a relatively small market. Assume that the initial investment to produce the product is $ 50 million and the present value of the cash ows from introducing the product now is only $ 20 million. This scenario is best described as...Option to delay /Option to expand/Option to abandon/Put option? explain it.
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