Question 6

A firm is evaluating a product. The market demand for the product can be low or high.

The product requires an investment of $1,030.

If the market demand is high, then there is a 40% chance that the product will sell for $900 and a 60% chance it will sell for $1,250.

What is the NPV of the project if the market demand is high?

Remember, if your answer is negative, then don't forget to put a - sign before your answer. For example, if your answer if negative 100, you should enter -100 in the answer box.