Entrepreneurial inc is evaluating a new product launch that, Ask an Expert

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Entrepreneurial Inc. is evaluating a new product launch that will cost it $36203 to launch. The company projects it will generate $658762 in annual operating cash flow at the end of each of the next 3 years, after which it will discontinue the product. The appropriate discount rate for the product is 11%.

If after the first year, the product is doing worse than expected, then the company projects annual cash flows will only be $402734 for the remaining two years of the project. What would be the value of the product line at that time (i.e. one year from now) in such a case?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92838589

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