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8 pt X Company is planning to launch a new product. A market research study, costing $190,000, was con year, indicating that
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Answer #1
Particulars Year Present value factor Present value
Present value of cash inflows:
Profit 1 0.9434 163000 153774
2 0.8900 163000 145070
3 0.9396 106000 89000
4 0.7921 106000 83961
Total Present value of cash inflows
Present value of cash outflows 0 1 451000 (451000)
(91000+360000)
Net Present Value $20,771Option D. is correct answer.
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