SoloFuego shoes wants to sign a new WNBA star to a 5-year deal that starts next year. She is expected to sell 50K shoes per year at a price of $130.00 per shoe. The variable cost of producing each shoe is $20.00, and the star has requested an up-front payment of $5M this year. The discount rate of the company is 9 percent. The net present value of signing the athlete is 56.11.

When does it make sense to delay an investment?

Answer rating: 100% (QA)

It makes sense to delay an investment when the present value ... View the full answer