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Sunshine Smoothies Company ( SSC ) manufactures and distributes smoothies. It is considering the introduction of a weight loss smoothie. The project would require a
Sunshine Smoothies Company SSC manufactures and distributes smoothies. It is considering the introduction of a "weight loss" smoothie. The project would require a $ million investment outlay today 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 years. There is 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 first year's cash flows. 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 but it will be able to sell the assets related to the project for $ million after taxes at
What is the expected NPV of the project if it cannot be abandoned? Enter your answer in millions. For example, an answer of $ should be entered as Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to two decimal places.
$ million
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