A jewellery companys Board of Directors is deciding whether they should invest in which new product line between the two initiatives below.

The first new product line initiative that relies on imported platinum and gold from Europe. This initiative will put the company in the right position to become an industry leader in product innovation.The initial investment of the project is $4,200,000and the project is expected to have a lifetime of 10 years.The new product line requires marketing activities with monthly spending of $187,000 is charged for agency service, Google AdWords search volume, SEO (Search Engine Optimization) and competitor data during the project. The new product line initiative is projected to bring a fixed revenue of $4,460,000 per year for the first 5 years and from the sixth year onwards it increases $180,000 per year until the end of the project.

The product enhancement initiative will rely on imported palladium Russia and South Africa. This initiative will help the company gain a greater market share and the initial cost of this project is estimated at $3,850,000 with no further monthly cost. This project is expected to last for 10 years and generate sales of $1,550,000 per year for the first three years and from the fourth year onwards it increases $350,000 per year until the end of its lifetime.The discount rate for both initiatives is 7%.

Use all of the Payback Period, IRR, NPV and Annualised NPV methods to evaluate both projects and select your preferred project.