Kimberly-Clark

1. KMB does not understand why mothers only use Kleenex to wipe their kids noses when they could be used for so many purposes wiping dirty hands after playing in the sandbox, wiping faces after eating, etc. They are considering a $3 million investment. If they can convince mothers to use tissues more often then they believe that they can earn an additional $400,000 for the next 10 years. Would you advise them to accept the project? Why?

2. KMB is considering expanding into the pet-care market with a line of cardboard-based kitty litter, puppy pee pads, and dog and cat diapers. Management expects that this would require an initial investment of $3 million. They anticipate sales of $100,000 in the first year. After that, sales would grow by 25% per year for the next 3 years as the products caught on. Then, sales would continue to grow at a constant 3% forever. Would you advise them to accept the project? Why?