1. Based on the calculated payback period, NPV, and IRR for each project:
   1. If these projects are independent, which project or projects would you recommend investing?
   2. If these projects are mutually exclusive, which project would you recommend? How would you consider the difference in the life of the projects in making this decision?

1. What is your final recommendation to Rodriquez? Why?

\begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{15}{|l|}{ Sneaker 2013 Assumptions } \\ \hline \multirow[t]{2}{*}{ (\$ millions) } & & 0 & & 1 & & 2 & & 3 & & 4 & & 5 & & 6 \\ \hline & & 2012 & & 2013 & & 2014 & & 2015 & & 2016 & & 2017 & & 2018 \\ \hline Sales (millions of pairs) & & & & 1.2 & & 1.6 & & 1.4 & & 2.4 & & 1.8 & & 0.9 \\ \hline Price/pair (net) & & & $ & 115 & $ & 115 & $ & 115 & $ & 115 & $ & 115 & $ & 115 \\ \hline Cannibalization (Erosion) & & & $ & 35 & $ & 15 & $ & - & $ & - & $ & - & $ & - \\ \hline Var Costs ( % of revenue) & & & & 55% & & 55% & & 55% & & 55% & & 55% & & 55% \\ \hline SG\&A expenses & & & $ & 7 & $ & 7 & $ & 7 & $ & 7 & $ & 7 & $ & 7 \\ \hline Endorsement costs & & & $ & 2 & $ & 2 & $ & 2 & $ & 3 & $ & 2 & $ & 2 \\ \hline \multicolumn{3}{|l|}{ Other advertising and promotion } & $ & 25 & $ & 15 & $ & 10 & $ & 30 & $ & 25 & $ & 15 \\ \hline \multicolumn{3}{|c|}{ Acc. Receivable ( % of net revenue) } & & 8% & & 8% & & 8% & & 8% & & 8% & & 8% \\ \hline Inventory ( % of var costs) & & & & 25% & & 25% & & 25% & & 25% & & 25% & & 25% \\ \hline Acc. Payable ( % of var costs) & & & & 20% & & 20% & & 20% & & 20% & & 20% & & 20% \\ \hline Factory expansion & $ & 150 & & & & & & & & & & & & \\ \hline Equipment & $ & 15 & & & & & & & & & & & & \\ \hline Freight and installation & $ & 5 & & & & & & & & & & & & \\ \hline Inventory & $ & 15 & & & & & & & & & & & & \\ \hline Acc. Payable & $ & 5 & & & & & & & & & & & & \\ \hline Tax rate & & 40% & & & & & & & & & & & & \\ \hline Factory market value (year 6) & & & & & & & & & & & & & $ & 102 \\ \hline \multicolumn{3}{|l|}{ Equipment market value (year 6 ) } & & & & & & & & & & & $ & 3 \\ \hline \end{tabular}