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Scenario 2 : Delay project initiation for test marketing What is the project's NPV under Scenario 2 ? - - > NPV with delay for
Scenario : Delay project initiation for test marketing What is the project's NPV under Scenario NPV with delay for test marketing:Scenario : Valuation of a project with a delay for test marketing WaveRider Surfboards is considering a oneyear test marketing phase for its new surfboard model, requiring an upfront investment of $ The management team estimates a chance of success, which would indicate strong market demand, and a chance of underperformance. Should the test marketing prove successful, WaveRider plans to invest $ in year to construct a facility for mass production, with projected annual profits of $ starting from year for five years. However, if the test marketing fails, the company may still proceed with the $ investment, but the expected annual cash flows would be projected to be $ from year for five years. Regardless of the outcome of the test marketing, WaveRider has the option to discontinue the project at no additional cost in Year The cost of capital is What is the project's NPV under Scenario
Scenario : Delay project initiation for test marketing
What is the project's NPV under Scenario
NPV with delay for test marketing:Scenario : Valuation of a project with a delay for test marketing
WaveRider Surfboards is considering a oneyear test marketing phase for its new surfboard
model, requiring an upfront investment of $ The management team estimates a
chance of success, which would indicate strong market demand, and a chance of
underperformance. Should the test marketing prove successful, WaveRider plans to invest
$ in year to construct a facility for mass production, with projected annual profits of
$ starting from year for five years. However, if the test marketing fails, the company
may still proceed with the $ investment, but the expected annual cash flows would be
projected to be $ from year for five years. Regardless of the outcome of the test
marketing, WaveRider has the option to discontinue the project at no additional cost in Year
The cost of capital is
What is the project's NPV under Scenario
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