Question: Please answer the question. X firm is going to develop a new service to clients. If it is launched without knowing about market opinions, there

Please answer the question.

Please answer the question. X firm is going to develop a new

X firm is going to develop a new service to clients. If it is launched without knowing about market opinions, there is a 60% probability to success . If so, it will bring a net present value of $500,000. If it turns out to be a failure instead, then it will be a loss of $100,000 (negative value of -$100,000). A market research will cost $60,000 and delay the launch by 1 year. After that, there is an 80% probability to success. The net present value for success and failure stays the same after the one year. The WACC for the firm is 10% while the cost of equity is 15% and the cost of debt is 4%. By how much does the research increase the expected net present value of the project

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