According to the case, Bernard’s value of original opportunity was $68.465K. Subtracted by the initial investment of $90K, the NPV was $21.535K. Thus, he planned to pass the opportunity. But his friends offered him alternatives which may generate positive outcomes to the project. With no options to either expand or buyout or both, if the viewer would be functional and website would be a winner, Bernard could make NPV= $366.44K by selling the business in six months. If the viewer were competitively functional in four months, but the website failed, Bernard would abandon the Web business and sell technology. He would add $25,000 of his money to turn the viewer into a shrink-wrapped software product. The selling price would be $450K and he would get a third of that. After being discounted to present, NPV would be $24.11K. He would have to sell the web business if the viewer was not functional and the website was successful. Bernard could get a third of the selling price of $300K which equaled $100K in six months. The NPV would be $1.29K. If both fail, eh would lose $90K in total. We’ve known

According to the case, Bernard’s value of original opportunity was $68.465K. Subtracted by the initial investment of $90K, the NPV was $21.535K. Thus, he planned to pass the opportunity. But his friends offered him alternatives which may generate positive outcomes to the project. With no options to either expand or buyout or both, if the viewer would be functional and website would be a winner, Bernard could make NPV= $366.44K by selling the business in six months. If the viewer were competitively functional in four months, but the website failed, Bernard would abandon the Web business and sell technology. He would add $25,000 of his money to turn the viewer into a shrink-wrapped software product. The selling price would be $450K and he would get a third of that. After being discounted to present, NPV would be $24.11K. He would have to sell the web business if the viewer was not functional and the website was successful. Bernard could get a third of the selling price of $300K which equaled $100K in six months. The NPV would be $1.29K. If both fail, eh would lose $90K in total. We’ve known