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Project Cougar has an initial after-tax cost of $150,000 at t=0. The project is expected to produce after-tax cash flows of $60,000 for the next
Project Cougar has an initial after-tax cost of $150,000 at t=0. The project is expected to produce after-tax cash flows of $60,000 for the next three years. The projects WACC is 12%. The projects CFs depend critically upon customers acceptance of the product. Theres a 50% probability that the product will be successful and generate annual after-tax CFs of $100,000, and a 50% probability that it will not be successful and hence produce annual after-tax CFs of -$10,000. Should the company abandon the project after a year
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