Question 5 A Firm Is Evaluating A Product The Market Demand For The Product Can Be Low Or


Question 5

A firm is evaluating a product. The market demand for the product can be low or


The product requires an investment of $1,070.

If the market demand is low, then there is a 70% chance that the product will sell for $800 and a 30% chance it will sell for $1,200.

What is the NPV of the project if the market demand is low?