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In projects red & blue what to do with $0.5 million. Project RED: Produce a new range of products, Project GREEN: Expansion of its existing
In projects red & blue what to do with $0.5 million.
Project RED: Produce a new range of products, Project GREEN: Expansion of its existing product range, Project BLUE: Develop a new high-quality production plant. Any of the investment decision shall be implemented from '' January 2022. If only one project is undertaken, the expected investments and cash inflows are as under: Project Initial Outlay (Million S) Expected Net Cash Inflows (Including Salvage Value) (Million $) Year Year Year Year Year 2022 2023 2024 2026 60 69 70 60 60 75 60 70 Nil Nil 50 63 52 75 Nil 2025 Red Green Blue 225 160 175 If projects Red & Green are jointly undertaken, there shall be no savings in investments required and also the net cash inflows shall remain the same. If projects Green and Blue are jointly undertaken, savings are possible only in investment because of the machines acquired can be used in both production processes. The combined investment required for projects Green & Blue is $334 million. If projects Red & Blue are jointly undertaken, there are combined savings of $0.5 million each year to be achieved in marketing expenses and production cost of the products but no havings are expected in investmentsStep by Step Solution
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