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Charisma Beauty Products is considering an investment in one of two new product lines. The investment required for either product line is $1,390,000. The net
Charisma Beauty Products is considering an investment in one of two new product lines. The investment required for either product line is $1,390,000. The net cash flows associated with each product are shown below. Recommend a product offering to Charisma Beauty Products, based on the cash payback period for each product line. Payback period for Shampoo/Conditioner: Payback period for Body Wash: All of the following statements are true regarding the product lines except: The cash payback periods are different between the two product lines. The Body Wash earns cash faster than does the Shampoo/Conditioner. The cash payback method emphasizes the initial years' net cash flows in determining the cash payback period. The project with the greatest net cash flows in the early years of the project life will be favored over the one with less net cash flows in the initial years
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