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Q1. (a) The ABC Company is currently evaluating the NPV of establishing a line of energy drinks. As part of the evaluation, the company paid
Q1. (a) The ABC Company is currently evaluating the NPV of establishing a line of energy drinks. As part of the evaluation, the company paid a consulting firm $80,000 last year for a test marketing analysis. Is this cost relevant for the capital budgeting decision now confronting ABC's management? Why and why not? (5 marks). (b) Wall's ice cream has recently launched a product called mini bites so that customers can have their favorite ice creams available in bite size. Will this product effect the sales of other products of Wall's ice cream? Keeping that is mind, should this new product be treated as an erosion or synergy for the existing products of Wall's? Give logical reasoning
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