Ang Electronics, Incorporated, has developed a new mesh network. If successful, the present value of the payoff (whenthe product is brought to market) is $34.9 million. If the mesh network fails, the present value of the payoff is $12.9million. If the product goes directly to market, there is a 50 percent chance of success. Alternatively, the company candelay the launch by one year and spend $1.39 million to test market the mesh network. Test marketing would allow thefirm to improve the product and increase the probability of success to 80 percent. The appropriate discount rate is 11percent. Calculate the NPV of going directly to market and the NPV of test marketing before going to market. (Do notround intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to the nearest wholenumber, e.g., 1,234, 567.) PLEASE GIVE WHOLE NUMBERS Go to market nowfirstTest marketing

Go to market now:Expected Net Present Value = ($34,900,000 * 50%) + ($12,900,000 * 50%)…

Answered: Ang Electronics, Incorporated, has…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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