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Being "early to market" with a new product often results in grabbing relatively high levels of market share. A newly designed wireless, noise canceling, high fidelity, specialty headphone with microphone is released for use in noisy control room settings. Pre-release Beta test reviews were excellent. Development costs, adjusted to time 0, are $3,000,000. Quarterly incomes begin at $750,000 at the end of Q1 and ramp up to $1,200,000, $1,500,000, and $2,250,000 over the next three quarters. Then, they begin to drop by $225,000 per quarter for the next two years. Choose a quarter-by-quarter cash flow diagram covering financial results over three years. A $2,250K B $2,250K $1,500K+ $1,500K+ $1,575 $1,200K $900K 8 9 10 11 12 End of Quarter (-) $450K $3,000K C $3,000K $2,925 0 1 2 3 4 5 6 7 8 9 10 11 12 End of Quarter $750K $900K $1,200K $1,575K (-) $750K $1,500K $2,250K D $1,200K $750K (-) $3,000K $2,250K $1,500K all $1,200K (+) $750K (-) $3,000K

Being "early to market" with a new product often results in grabbing relatively high levels of market share. A newly designed wireless, noise canceling, high fidelity, specialty headphone with microphone is released for use in noisy control room settings. Pre-release Beta test reviews were excellent. Development costs, adjusted to time 0, are $3,000,000. Quarterly incomes begin at $750,000 at the end of Q1 and ramp up to $1,200,000, $1,500,000, and $2,250,000 over the next three quarters. Then, they begin to drop by $225,000 per quarter for the next two years. Choose a quarter-by-quarter cash flow diagram covering financial results over three years. A $2,250K B $2,250K $1,500K+ $1,500K+ $1,575 $1,200K $900K 8 9 10 11 12 End of Quarter (-) $450K $3,000K C $3,000K $2,925 0 1 2 3 4 5 6 7 8 9 10 11 12 End of Quarter $750K $900K $1,200K $1,575K (-) $750K $1,500K $2,250K D $1,200K $750K (-) $3,000K $2,250K $1,500K all $1,200K (+) $750K (-) $3,000K

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Being "early to market" with a new product often results in grabbing relatively high levels of market share. A newly designed wireless, noise canceling, high fidelity, specialty headphone with microphone is released for use in noisy control room settings. Pre-release Beta test reviews were excellent. Development costs, adjusted to time 0, are $3,000,000. Quarterly incomes begin at $750,000 at the end of Q1 and ramp up to $1,200,000, $1,500,000, and $2,250,000 over the next three quarters. Then, they begin to drop by $225,000 per quarter for the next two years. Choose a quarter-by-quarter cash flow diagram covering financial results over three years. A $2,250K B $2,250K $1,500K $1,500K $1,575 $1,200K $900K 89 10 11 12 4 End of Quarter $450K 4 5 6 7 8 9 10 11 12 $900K $1,575K C (+) 0 (-) $3,000K $3,000K (+) 0 $750K (-) 1 $750K 3 $1,200K $1,500K Save for Later 2 5 6 $2,250K is the correct diagram. End of Quarter D $1,200K $750K (+) (-) $3,000K $1,200K (+) $750K 0112| $2,250K $1,500K 3 4 6 $2,925 5 6 (-) $3,000K Attempts: 0 of 1 used Submit Answer
Transcribed Image Text:Being "early to market" with a new product often results in grabbing relatively high levels of market share. A newly designed wireless, noise canceling, high fidelity, specialty headphone with microphone is released for use in noisy control room settings. Pre-release Beta test reviews were excellent. Development costs, adjusted to time 0, are $3,000,000. Quarterly incomes begin at $750,000 at the end of Q1 and ramp up to $1,200,000, $1,500,000, and $2,250,000 over the next three quarters. Then, they begin to drop by $225,000 per quarter for the next two years. Choose a quarter-by-quarter cash flow diagram covering financial results over three years. A $2,250K B $2,250K $1,500K $1,500K $1,575 $1,200K $900K 89 10 11 12 4 End of Quarter $450K 4 5 6 7 8 9 10 11 12 $900K $1,575K C (+) 0 (-) $3,000K $3,000K (+) 0 $750K (-) 1 $750K 3 $1,200K $1,500K Save for Later 2 5 6 $2,250K is the correct diagram. End of Quarter D $1,200K $750K (+) (-) $3,000K $1,200K (+) $750K 0112| $2,250K $1,500K 3 4 6 $2,925 5 6 (-) $3,000K Attempts: 0 of 1 used Submit Answer
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