X Company is planning to launch a new product. A market research study, costing $150,000, was conducted last year, indicating that the product will be successful for the next four years. Profits from sales of the product are expected to be $154,000 in each of the first two years and $100,000 in each of the last two years. The company plans to undertake an immediate advertising campaign that will cost $87,000. New manufacturing equipment will have to be purchased for $380,000; it will have zero disposal value at the end of the four years. Assuming a discount rate of 5%, what is the net present value of launching the new product?

X Company is planning to launch a new product. A market research study, costing $150,000, was conducted last year, indicating that the product will be successful for the next four years. Profits from sales of the product are expected to be $154,000 in each of the first two years and $100,000 in each of the last two years. The company plans to undertake an immediate advertising campaign that will cost $87,000. New manufacturing equipment will have to be purchased for $380,000; it will have zero disposal value at the end of the four years. Assuming a discount rate of 5%, what is the net present value of launching the new product? Submit Answer Tries 0/3