Development Cost year0? Equipment cost year0? Sales year1 and year4? VC 1 n 4? FC 1 n 4? Ad 0 n 1? WCIR 0 1 4? PCF 014 B 014 P X 0

Use the following Information to answer questions 9 to 15 below: B-TEQ Inc.'s board has voted to go ahead with its new low cost Rapid Cavid Result (RCR) test. In the past, B-TEQ Invested $1,080,000 in the development and testing of the RCR test and is satisfied that the test results are accurate, Regulators have also approved the test for use by the general public B-TEQ must now decide whether to go ahead with a worldwide product launch - Project Global RCR or a launch in Canada and the USA only - "Project Local ROR! Project Global RCR: The project life is 4 years. The average sales price per test in Canadian dollar terms is $3 and B-TEQ estimate that they will be able to sell 100 million tests in the first year. Thereafter, unit sales are expected to decline by 25 million tests every year as vaccines are being developed and commercialized. Variable costs are $1 per test. Fixed costs are expected to be $5,000,000 a year. Global advertising is expected to be $4,000,000 upfront at the start of the project, declining by $1,000,000 a year at the start of each year. The required working capital investment is 10% of sales for the following year. Manufacturing equipment for global scale production costs $180.000.000 80% of sales will be to countries in Asia, Africa and South America and Mexico, 10% to the USA and Canada and 10% to Europe. The discount rate for the global project is 24%. Due to the scale of the global project. B-TEQ will partner with a firm in Malaysia who will be a 50% partner with respect to all the project cash flows. B-TEQ will also have to put Project X an unrelated project with a NPV of $25,000,000, on hold indefinitely due to limited capital W 20 1 D F costs are expected to be $5,000,000 a year Global advertising is expected to be $4,000,000 upfront at the start of the project, declining by $1,000,000 a year at the start of each year. The required working capital Investment is 10% of sales for the following year. Manufacturing equipment for global scale production costs $180,000,000 B0% of sales will be to countries in Asia, Africa and South America and Mexico, 10% to the USA and Canada and 10% to Europe. The discount rate for the global project is 24%. Due to the scale of the global project, B-TEQ will partner with a firm in Malaysia, who will be a 50% partner with respect to all the project cash flows. B-TEQ will also have to put Project X, an unrelated project, with a NPV of $25,000,000, on hold indefinitely due to limited capital Project Local ROR: The project life is also 4 years, but the project is on a much smaller scale. The average sales price, however, in Canadian dollar terms is much higher at 56 per test. Sales volumes of the local project is estimated at 10 million tests in the horst year. Thereafter sales are expected to decline by 2.5 million tests every year as vaccines are being developed and commercial red. Variable costs are $2 per test. Fixed costs are expected to be $1.000.000 a year Advertising is the USA and Canada is expected to be $200,000 upfront at the start of the project declining by $50,000 a year at the start of each year. The required working capital investment is 10% of sales for the following year. Manufacturing equipment for USA and Canada production only, costs $20,000,000. The discount rate for the local project is 12%, the same as B-TEQ's cost of capital MacBoo Complete the missing items in the table below for Protect Global VERY IMPORTANT -> Enterobas hown.info Integers only law to do . Do not use the Son Use commar to sparate thousands Showcash outflows round buckets . there is no relevant incremento cash or outflow.arter. Do not one blanke Do not leave extra spaces Example: A cash low of $25 mlion should be entered as 125,000,000) Pret: GARCR Vero Year Development Lot 225.000.000 150.000.000 175.000.000 150.000.000 15.000.000.000,00 Advertising 12.000.000 1.000.0001 working ortal 7.500.000 7.500.000 RECOVERY Project cash now 150,500,000 101.500.000 TE 50 50,750,000 Use the following Information to answer questions 9 to 15 below: B-TEQ Inc.'s board has voted to go ahead with its new low cost Rapid Cavid Result (RCR) test. In the past, B-TEQ Invested $1,080,000 in the development and testing of the RCR test and is satisfied that the test results are accurate, Regulators have also approved the test for use by the general public B-TEQ must now decide whether to go ahead with a worldwide product launch - Project Global RCR or a launch in Canada and the USA only - "Project Local ROR! Project Global RCR: The project life is 4 years. The average sales price per test in Canadian dollar terms is $3 and B-TEQ estimate that they will be able to sell 100 million tests in the first year. Thereafter, unit sales are expected to decline by 25 million tests every year as vaccines are being developed and commercialized. Variable costs are $1 per test. Fixed costs are expected to be $5,000,000 a year. Global advertising is expected to be $4,000,000 upfront at the start of the project, declining by $1,000,000 a year at the start of each year. The required working capital investment is 10% of sales for the following year. Manufacturing equipment for global scale production costs $180.000.000 80% of sales will be to countries in Asia, Africa and South America and Mexico, 10% to the USA and Canada and 10% to Europe. The discount rate for the global project is 24%. Due to the scale of the global project. B-TEQ will partner with a firm in Malaysia who will be a 50% partner with respect to all the project cash flows. B-TEQ will also have to put Project X an unrelated project with a NPV of $25,000,000, on hold indefinitely due to limited capital W 20 1 D F costs are expected to be $5,000,000 a year Global advertising is expected to be $4,000,000 upfront at the start of the project, declining by $1,000,000 a year at the start of each year. The required working capital Investment is 10% of sales for the following year. Manufacturing equipment for global scale production costs $180,000,000 B0% of sales will be to countries in Asia, Africa and South America and Mexico, 10% to the USA and Canada and 10% to Europe. The discount rate for the global project is 24%. Due to the scale of the global project, B-TEQ will partner with a firm in Malaysia, who will be a 50% partner with respect to all the project cash flows. B-TEQ will also have to put Project X, an unrelated project, with a NPV of $25,000,000, on hold indefinitely due to limited capital Project Local ROR: The project life is also 4 years, but the project is on a much smaller scale. The average sales price, however, in Canadian dollar terms is much higher at 56 per test. Sales volumes of the local project is estimated at 10 million tests in the horst year. Thereafter sales are expected to decline by 2.5 million tests every year as vaccines are being developed and commercial red. Variable costs are $2 per test. Fixed costs are expected to be $1.000.000 a year Advertising is the USA and Canada is expected to be $200,000 upfront at the start of the project declining by $50,000 a year at the start of each year. The required working capital investment is 10% of sales for the following year. Manufacturing equipment for USA and Canada production only, costs $20,000,000. The discount rate for the local project is 12%, the same as B-TEQ's cost of capital MacBoo Complete the missing items in the table below for Protect Global VERY IMPORTANT -> Enterobas hown.info Integers only law to do . Do not use the Son Use commar to sparate thousands Showcash outflows round buckets . there is no relevant incremento cash or outflow.arter. Do not one blanke Do not leave extra spaces Example: A cash low of $25 mlion should be entered as 125,000,000) Pret: GARCR Vero Year Development Lot 225.000.000 150.000.000 175.000.000 150.000.000 15.000.000.000,00 Advertising 12.000.000 1.000.0001 working ortal 7.500.000 7.500.000 RECOVERY Project cash now 150,500,000 101.500.000 TE 50 50,750,000