Assignment Questions

What are the backgrounds of the investment environment and the soda market in Mexico?

What are the relevant cash flows?

Should we consider the erosion of the existing product$-$ the regular sodas$-$in the analysis? Why or why not?

Calculate the project's NPV$,$ IRR, and payback period.

Perform sensitivity analyses and calculate the project's NPV$,$ IRR, and payback period if

a$.$ sales volume increases $4\mathrm{.}5\%$

b$.$ unit price increases $20\%$

c$.$ direct labor cost increases $5\%$

d$.$ raw materials increase $5\%$

e$.$ energy cost increases $5\%$

What are the benefits and risks of undertaking this project?

Should Sangria Topochico undertake this project?