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Hickock Mining is evaluating when to open a gold mine. The mine has 41,600 ounces of gold left that can be mined, and mining operations will produce 5,200 ounces per year. The required return on the gold mine is 12 percent and it will cost $33.2 million to open the mine. When the mine is opened, the company will sign a contract that will guarantee the price of gold for the remaining life of the mine. If the mine is opened today, each ounce of gold will generate an aftertax cash flow of $1,320 per ounce. If the company waits one year, there is a 60 percent probability that the contract price will generate an aftertax cash flow of $1,520 per ounce and a 40 percent probability that the aftertax cash flow will be $1,220 per ounce. What is the value of the option to wait? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.) Option value B&B has a new baby powder ready to market. If the firm goes directly to the market with the product, there is only a 65 percent chance of success. However, the firm can conduct customer segment research, which will take a year and cost $1.28 million. By going through research, B&B will be able to better target potential customers and will increase the probability of success to 80 percent. If successful, the baby powder will bring a present value profit (at time of initial selling) of $19.8 million. If unsuccessful, the present value payoff is $6.8 million. The appropriate discount rate is 13 percent. Calculate the NPV for the firm if it conducts customer segment research and if it goes to market immediately. (Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.) NPV Market immediately Research option Should the firm conduct customer segment research or go to the market immediately?? Conduct research O Market immediately

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