Question

You plan to carry out a marketing campaign for your firm. You estimate that the campaign...

You plan to carry out a marketing campaign for your firm. You estimate that the campaign will cost the firm $500,000 right away. You expect that the campaign will yield $270,000 in positive cash flow at the end of year 1 and $300,000 at the end of year 2. If the discount rate is 10%, does it make sense to execute the campaign? Calculate the net present value of the project to support your conclusion. Specify the calculation process.

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