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A cardboard box manufacturing company is deciding between 3 different improvement projects for next year. This company considers an equivalence rate of 1.5% per month.

A cardboard box manufacturing company is deciding between 3 different improvement projects for next year. This company considers an equivalence rate of 1.5% per month. It currently has a budget of 1,000,000 pesos available for one of these projects.

The first is the acquisition of a German technology printing machine which requires an immediate investment of costs of transfer, coupling and installation of 950,000 pesos. Using this technology will generate a savings of 50,000 pesos per month for the company for 2 years.

The second is the expansion of the winery, with a budget of 800,000 pesos. This will allow the company to generate a stock to serve customers who require it in their scheme, which the company considers will generate an increase in profits after one year of 200,000 per month for one year.

The third is a certification program for Warehouse of products for the food industry, the investment in consulting, remodeling, and the certification process is estimated at 500,000 pesos today and 450,000 in 6 months. This certification will allow the company to sell products to Kinder for next Halloween (1 year later), which would generate a profit of 1,800,000 pesos.

What project should the company choose? Why?

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