(raw) material costs - labor costs

Assignment Help Accounting Basics

Reference no: EM131055059

What is the problem? Sensitivity Analysis What numbers impact the NPV?

(Raw) material costs - labor costs
Sales revenues
Other operating expenses
Capital Budgeting Analysis

How will this project contribute to the firm's value?

Which questions do we have to answer? 1) What are the relevant cash flows?

Should we consider the erostion of the existing product?
What are the NPV, IRR, payback, discounted payback and profitability index?
Sensitivity analysis
What are the benefits and risks for undertaking this project?
Should Bebida Sol undertake this project? What are the relevant cash flows?

Conclusion

Should Bebida Sol commence this product?

Mexico

High rates of overweight/obesity due to high soft drink consumption Bebida Sol

Soft drink company in Mexico

Nola Kola

A no calory alternative soft drink

Erosion Costs?

NPV, IRR, Profability Index. Payback Period

Benefits and Risks

Benefits:

Increased market share for Bebida Sol

- Increased net Income

Reference no: EM131055059

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