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SSC is considering another project: the introduction of a weight loss smoothie. The project would require a $ 3 . 6 million investment outlay today
SSC is considering another project: the introduction of a "weight loss" smoothie. The project would require a $ million investment outlay today t The aftertax cash flows would depend on whether the "weight loss" smoothie is well received by consumers. There is a chance that demand will be good, in which case the project will produce aftertax cash flows of $ million at the end of each of the next years. There is a chance that demand will be poor, in which case the aftertax cash flows will be $ million for years. The project is riskier than the firm's other projects, so it has a WACC of The firm will know if the project is successful after receiving the cash flows the first year, and after receiving the first year's cash flows it will have the option to abandon the project. If the firm decides to abandon the project the company will not receive any cash flows after t but it will be able to sell the assets related to the project for $ million after taxes at t Assuming the company has an option to abandon the project, what is the expected NPV of the project today? Round your answer to decimal places. Do not round your intermediate calculations. Use the values in "millions of dollars" to ascertain the answer. $ millions of dollars
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