Ch 25 Pro 4 Please give me instruction to figure the answer Cash Payback Method Lily Products Company is considering an investment in one of two new product lines. The investment required for either product line is $540,000. The net cash flows associated with each product are as follows: Year Liquid Soap Body Lotion 1 $170,000 $ 90,000 2 150,000 90,000 3 120,000 90,000 4 100,000 90,000 5 70,000 90,000 6 40,000 90,000 7 40,000 90,000 8 30,000 90,000 Total $720,000 $720,000 a. Recommend a product offering to Lily Products Company, based on the cash payback period for each product line. ________________ Payback period for liquid soap ________________________ Payback period for body lotion _________________________ b. The project with the ___________ net cash flows in the early years of the project life will be favored over the one with the __________ net cash flows in the initial years. Liz C
Ch 25 Pro 4 Please give me instruction to figure the answer Cash Payback Method Lily Products Company is considering an investment in one of two new product lines. The investment required for either product line is $540,000. The net cash flows associated with each product are as follows: Year Liquid Soap Body Lotion 1 $170,000 $ 90,000 2 150,000 90,000 3 120,000 90,000 4 100,000 90,000 5 70,000 90,000 6 40,000 90,000 7 40,000 90,000 8 30,000 90,000 Total $720,000 $720,000 a. Recommend a product offering to Lily Products Company, based on the cash payback period for each product line. ________________ Payback period for liquid soap ________________________ Payback period for body lotion _________________________ b. The project with the ___________ net cash flows in the early years of the project life will be favored over the one with the __________ net cash flows in the initial years. Liz C
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Ch 25 Pro 4
Please give me instruction to figure the answer
Cash Payback Method
Lily Products Company is considering an investment in one of two new product lines. The investment required for either product line is $540,000. The net
| Year | Liquid Soap | Body Lotion | ||
| 1 | $170,000 | $ 90,000 | ||
| 2 | 150,000 | 90,000 | ||
| 3 | 120,000 | 90,000 | ||
| 4 | 100,000 | 90,000 | ||
| 5 | 70,000 | 90,000 | ||
| 6 | 40,000 | 90,000 | ||
| 7 | 40,000 | 90,000 | ||
| 8 | 30,000 | 90,000 | ||
| Total | $720,000 | $720,000 |
a. Recommend a product offering to Lily Products Company, based on the cash payback period for each product line. ________________
| Payback period for liquid soap | ________________________ |
| Payback period for body lotion | _________________________ |
b. The project with the ___________ net cash flows in the early years of the project life will be favored over the one with the __________ net cash flows in the initial years.
Liz C
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