Which project do you think is riskier

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Reference no: EM133433902

Question: Should the following be included in Sneaker 2013's capital budgeting cash flow projection? Why or why not?

Building a factory and purchase/installation of the equipment
Research and development costs
Cannibalization of other sneaker sales
Interest costs
Changes in current asset/current liability accounts
Taxes
Cost of goods sold
Advertising and promotion expenses
Depreciation charges

Assuming the following, which of these projects looks better for New Balance shareholders? Why?

	Payback Period	NPV	IRR
Sneaker 2012	5.10	13.36	12.82%
Persistence	2.34	8.59	21.75%

Which project do you think is riskier? Why?
What is your final recommendation to Rodriguez?

Reference no: EM133433902

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