Bob, the new Chief Marketing Officer at the XYZ Company has proposed an expansion of the companies marketing efforts. He claims that an investment of $1,000,000 in marketing research this year, and following this with an increase in marketing expenditures of $250,000 a year will increase sales by 10% each year over the sales forecasted without the marketing program. The sales forecasts and costs are shown below. The market research study is not depreciable but should be considered as an investment in year 0.
Should Bob's plan be approved using the PW and IRR criteria using a 4-yearanalysis?

  • CreatedAugust 26, 2013
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