You are considering producing a new product, which if it is successful will produce cash flows of $45,000 per year in perpetuity. It it is unsuccessful, the cash flow will be -$5,000 in the first yoar and then you will shut down. If the probability of success is 0.8 and the opportunity cost of capital is 7 percent, what is the maximum that you would be willing to pay to undertake the investment? Enter your response below. Number

Answer rating: 100% (QA)

45000 007 5000 107 would be willing to 1642 857 ... View the full answer