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Proctor and Gamble is analyzing the feasibility of producing a special Halloween mouthwash which temporarily turns your teeth orange and black. If this mouthwash is
Proctor and Gamble is analyzing the feasibility of producing a special Halloween mouthwash which temporarily turns your teeth orange and black. If this mouthwash is produced, 250 machine hours will be taken away from existing product lines. Proctor and Gamble's analysts give the following dollar amounts and/or estimates related to the new mouthwash. PV of additional sales of Halloween mouthwash $400,000 Consulting fees paid for marketing analysis last year $75,000 PV of sales lost by other Proctor and Gamble mouthwashes $85,000 PV of cost of 250 machine hours $200,000 From the amounts given above, the net cash flow that is relevant to the capital budgeting decision is A) $240,000 B) $325,000 C) $200,000 D) $315,000 E) $115,000
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