Gidget has a new widget to bri

Gidget has a new widget to bring to market. If the firm
goes directly to market with the product, there is a 55% chance of
success. However, the firm can conduct a customer segment
research, which will take a year and cost $750,000. By going
through research, the company will be able to better target
potential customers and will increase the probability of success to
90%. If successful, the widget will bring a present value
profit (at time of initial selling) of $5 million. If
unsuccessful, the present value profit is only $1 million.
The appropriate discount rate is 15%.

Calculate the NPV of going directly to the market.
(Enter whole numbers, e.g. 5 million should be
5,000,000)

Calculate the NPV for conducting customer segment
research. (Enter whole numbers, e.g. 5 million should be
5,000,000)

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