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can you please provide a detailed explanation? I need to know how to do this for an upcoming exam. 4) B&B has a new baby
can you please provide a detailed explanation? I need to know how to do this for an upcoming exam.
4) B&B has a new baby powder ready to market. If the firm goes directly to the market with the product, there is only a 60 percent chance of success. However, the firm can conduct customer segment research, which will take a year and cost $750,000. By going through research, B&B will be able to better target potential customers and will increase the probability of success to 75 percent. If successful, the baby powder will bring a present value profit (at time of initial selling of $28 million. If unsuccessful, the present value payoff is only $5 million. Draw the decision tree for this situation. Should the firm conduct customer segment research or go directly to market? The appropriate discount rate is 12 percentStep by Step Solution
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