NPV Profiles for Mutually Exclusive Investments Select Scenario 1. New information is found that indicates the likelihood of success for in house develpment is lower. 2. A third firm announces that it wil be developing an anti-spam product that competes directly with Brightmail's, lowering the expected profits and cash flows from the purchase. (1) 3. Symantec's new product takes longer than expected to gain market acceptance, but still delivers strong sales and profits. 4. New information indicates that many key employees and some important customers will leave Brightmail if it is purchased. 5. The new product develped inhouse is successful in market tests and is expected to take off faster than previously estimated, Also, Brightmail develops a new version of its product that takes time to gain market acceptance, but delivers strong sales and profits in a few years. DATA Cash Flows \begin{tabular}{|c|c|c|} \hline Year i & A: Purchase & B:DevelopWithin \\ \hline 0 & $370,000 & $370,000 \\ \hline 1 & $110,000 & $75,000 \\ \hline 2 & $100,000 & $75,000 \\ \hline 3 & $100,000 & $100,000 \\ \hline 4 & $100,000 & $125,000 \\ \hline 5 & $75,000 & $125,000 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline DiscountRate & NPV A & NPV B \\ \hline, 0% & $115,000 & $130,000 \\ \hline 2% & $88,507 & $98,546 \\ \hline 4% & $64,249 & $69,948 \\ \hline 6% & $41,989 & $43,885 \\ \hline 8% & $21,516 & $20,080 \\ \hline 10% & $2,647 & $1,711 \\ \hline 12% & $14,779 & $21,700 \\ \hline 14% & $30,904 & $40,072 \\ \hline \end{tabular} Trend of Graph The questions are based on the data from the interactive. Answer the following questions for these two mutually exclusive projects. The NPV profile displays the relative NPV of the two choices over different discount rates, the IRR for each project, and the crossover point. For these questions, use the default settings; do not select a scenario. For low discount rates, which choice creates more value for the firm? Multiple Choice Purchase Develop within