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You are thinking of starting a new product line that will cost P40,000 up front. Your annual projected cash inflows are: Year 1 P12,000 Year

You are thinking of starting a new product line that will cost P40,000 up front.

Your annual projected cash inflows are:

Year 1 P12,000

Year 2 P18,000

Year 3 P 8,000

If you must earn a minimum of 10% on your investment, should you undertake this product line? Show solutions to your answer.

Additional Question:

a. Why we need to value?

b. Why valuation matters to business people?

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