Wardrobe Clothing Manufacturers is preparing a strategy for the fall season. One strategy is to go to a highly imaginative, new, fourgoldbutton sports coat. The allwool product would be available for males and females. A second option would be to produce a traditional blue blazer line. The marketing research department has determined that the fourgoldbutton and traditional blue blazer lines offer the following probabilities of outcomes and related cash flows:

	New Coat						Blue Blazer
Expected sales	Probability			Present value of cash flow from sales			Probability			Present value of cash flow from sales
Fantastic		0.3		$190,000				0.4		$311,000
Moderate		0.3		188,000				0.1		245,000
Dismal		0.4		85,600				0.5		0

The initial cost to get into the new coat line is $135,000 in designs, equipment, and inventory. To enter the blue blazer line, the initial cost in designs, inventory, and equipment is $142,000.

a. Calculate Net present value. (Negative answers should be indicated by a minus sign.)

	Net present value
Enter New Coat Market	$
Enter Blazer Market	$

b. This part of the question is not part of your Connect assignment.