Sarah D is thinking of realsing her 4th full length CD. It will take an upfront $3000 production expense to manf 1000CD.She willl have advertsing and marketing expenses of $5,000the first year,$4,000 the 2nd year, and $3,000 the third year and $0 the last year. The CD will sell for $16 ea. Marketing /advertising research shows she will sell 400 cds the 1st yr ,300 the 2nd yr, 200 the 3rd yr and 100 the last year.Opportunity cost of captial is 10%
a. Build the project evaluation table est cash in/outflows in their appropriate horizion.
B. Should she fund the project? USe net prsent value analysis
C. Sarah D opp cost rises to 15%.Now should she fund it?