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In the 1860s, General Mills Inc. and Pillsbury Inc. both started in the flour business in the Twin Cities of Minneapolis-St. Paul, Minnesota. In the
In the 1860s, General Mills Inc. and Pillsbury Inc. both started in the flour business in the Twin Cities of Minneapolis-St. Paul, Minnesota. In the decade of 2000 to 2010, General Mills purchased Pillsbury for a combination cash and stock deal worth more than $10 billion and integrated the product lines. Food engineers, food designers, and food safety experts made many cost estimates as they determined the needs of consumers and the combined company's ability to technologically and safely produce and market new food products. At this point only cost estimates have been addressed-no revenues or profits. Assume that the major cost estimates below have been made based on a 6-month study about two new products that could have a 10-year life span for the company. Use LCC analysis at the industry MARR of 15% to determine the size of the commitment in AW terms. (Time is indicated in product-years. Since all estimates are for costs, they are not preceded by a minus sign.)
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