Answer question 2 to 5

Background Fruit Creations Ltd is a company based in the United States known for its manufacturing fruit-based energy drinks popular with teens and busy professionals. As part of a strategic review, the company is considering diversifying its product range by focusing on more health-focused fruit smoothies. The board of directors are split between targeting maximising shareholder wealth whilst also incorporating the wider objectives of sustainability and managing the company's environmental impact. As a result, two projects have been proposed to the board of directors. Both projects under consideration involve manufacturing similar types of smoothies; however the source of raw materials vary significantly between them. The first project involves using locally sourced organic fruit and the second project involves using imported non-organic fruit. To date, the company has spent $150,000 on research and development and the outcome of this has been received well, especially the locally sourced smoothies which have attracted much attention from health and tness conscious consumers in the United States. The company currently employs over 300 people as well as some limited processing automated equipment. It mainly attracts unskilled immigrant labour from South America to help control production costs. The Finance Director has tasked his team to provide some financial information with respect to these two independent products, and the relevant information is as follows: 1) The products will be sold individually (units) with projected sales below: Local Organic Smoothies 190,000 140, 000 200,000 170,000 250,000 220,000 300,000 370,000 480,000 400,000 Imported Smoothies 2) Additional estimated nancial information: Product Local Imported Sales price per Smoothie $3.70 Direct Variable cost per Smoothie $1.40 Annual fixed costs excl. depreciation $140,000 $120,000 Annual marketing and administrative costs $130,000 $120,000 Capital investment $500,000 $500,000 Scrap value $20,000 $25,000 The company has already purchased $100,000 worth of compostable bottles for a previous export order which has been cancelled. These bottles are available to be used for either of the two projects Market analysis costs incurred to date are $150,000 and this spend has been assumed to be equally spread across the two products. Core findings from this market analysis