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Gentle Care Products Company is considering an investment in one of two new product lines. The investment required for either product line is $500,000. The
Gentle Care Products Company is considering an investment in one of two new product lines. The investment required for either product line is $500,000. The net cash flows associated with each product are as follows:
Year | Liquid Soap | Body Lotion |
---|---|---|
1 | $190,000 | $100,000 |
2 | 180,000 | 100,000 |
3 | 130,000 | 100,000 |
4 | 110,000 | 100,000 |
5 | 80,000 | 100,000 |
6 | 50,000 | 100,000 |
7 | 30,000 | 100,000 |
8 | 30,000 | 100,000 |
Total | $800,000 | $800,000 |
Exercise 25(10)-6 | Name: | ||||||||||
Section: | |||||||||||
Enter the appropriate amount in the shaded cells below. | |||||||||||
A red asterisk (*) will appear to the right of an incorrect amount in the outlined cells. | |||||||||||
a. | |||||||||||
Initial investment: | |||||||||||
Liquid Soap | Body Lotion | ||||||||||
Net Cash Flow | Cumulative Net Cash Flows | Net Cash Flow | Cumulative Net Cash Flows | ||||||||
Year 1 | |||||||||||
Year 2 | |||||||||||
Year 3 | |||||||||||
Year 4 | |||||||||||
Year 5 | |||||||||||
Enter your recommendation below. | |||||||||||
b. | |||||||||||
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