A Vietnamese large jewelry company's Board of Directors is deciding whether they should invest in which new product line between the two initiatives below.

The first newproductline initiative thatreliesonimported platinumandgold from South Africa. This initiative will put the company in the right position to become an industry leader in product innovation. The initialinvestment oftheprojectis $4,200,000 andtheprojectis 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 Ad Words 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 onward 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 helpthecompanygainagreatermarketshareandthe initial costofthis 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 andfrom the fourth year onward it increases $350,000 per year until the end of its lifetime.The discount rate for both initiatives is 7%.

Requirements:

Use the appropriatemethod(s)toevaluate bothprojects andselectyour preferred project.