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DUE IN 20 MINUTES. PLEASE ANSWER AS SOON AS POSSIBLE. Thank you! Allson's Dresswear Manufacturers is preparing a strategy for the fall season. One alternative
DUE IN 20 MINUTES. PLEASE ANSWER AS SOON AS POSSIBLE. Thank you!
Allson's Dresswear Manufacturers is preparing a strategy for the fall season. One alternative is to expand its traditional ensemble of wool sweaters. A second option would be to enter the cashmere sweater market with a new line of high-quality designer label products. The marketing department has determined that the wool and cashmere sweater lines offer the following probability of outcomes and related cash flows. Expected sales Fantastic Moderate Low Expand Wool Sweaters Line Present Value of Cash Flow Probability from Sales 0.4 $250.000 0.4 182,000 0.2 94,000 Enter Cashmere Sweaters Line Present Value of Canh love Probability from Sales 0.1 $324,000 0.3 302,000 0 0.6 The initial cost to expand the wool sweater line is $147,000. To enter the cashmere sweater line, the initial cost in designs, inventory, and equipment is $149,000. a. Calculate net present value if, Allison's Dresswear Manufacturers decides to: (Negative amounts should be indicated by a minus sign. Do not round Intermediate calculations. Round your answers to the nearest whole dollar.) Net Present Value Expand wool sweaters in Enter cashmere sweaters line Step by Step Solution
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