Jasmine's Dresswear Manufacturers is preparing a strategy for the fall season. One alternative is to expand its traditional ensemble of wool sweaters. A second option would be to enter the cashmere sweater market with a new line of high-quality designer label products. The marketing department has determined that the wool and cashmere sweater lines offer the following probability of outcomes and related cash flows: Expected Sales Fantastic Moderate Low Expand Wool Sweaters Line Probability 0.2 Expand wool sweaters line Enter cashmere sweaters line 0.5 0.3 Present Value of Cash Flows from Sales $ 240,000 133,000 86,100 Enter Cashmere Sweaters Line Present Value of Cash Flows from Sales $ 344,000 259,000 0 The initial cost to expand the wool sweater line is $129,000. To enter the cashmere sweater line, the initial cost in designs, inventory, and equipment is $145,000. Probability 0.5 0.3 0.2 a. Calculate net present value if, Jasmine's Dresswear Manufacturers decides to: Note: Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest whole dollar. Net Present Value

Jasmine's Dresswear Manufacturers is preparing a strategy for the fall season. One alternative is to expand its traditional ensemble of wool sweaters. A second option would be to enter the cashmere sweater market with a new line of high-quality designer label products. The marketing department has determined that the wool and cashmere sweater lines offer the following probability of outcomes and related cash flows: Expected Sales Fantastic Moderate Low Expand Wool Sweaters Line Probability 0.2 Expand wool sweaters line Enter cashmere sweaters line 0.5 0.3 Present Value of Cash Flows from Sales $ 240,000 133,000 86,100 Enter Cashmere Sweaters Line Present Value of Cash Flows from Sales $ 344,000 259,000 0 The initial cost to expand the wool sweater line is $129,000. To enter the cashmere sweater line, the initial cost in designs, inventory, and equipment is $145,000. Probability 0.5 0.3 0.2 a. Calculate net present value if, Jasmine's Dresswear Manufacturers decides to: Note: Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest whole dollar. Net Present Value

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 2PB

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Please give answer for A and B
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