Campbell Soup Company is an international provider of soup products. Management is very interested in continuing to grow the company in its core business, while “spinning off ” those businesses that are not part of its core operation.

Address: www.campbellsoups.com, or go to www.wiley.com/college/kimmel

Steps
  1. Go to the home page of Campbell Soup Company at the address shown above.
  2. Choose Our Company and then Investor Center.
  3. Choose Financial Reports.
  4. Choose the 2008 annual report, or the current annual report if 2008 is no longer available.

Instructions
Review the financial statements and management’s discussion and analysis, and answer the following questions.
  (a) What was the total amount reported as “Purchases of Plant Assets” in the 2008 statement of cash flows? How does this amount compare with the previous year?
  (b) What range of interest rates does the company report on its long-term liabilities in the notes to its financial statements?
  (c) Assume that this year’s capital expenditures are expected to increase cash flows by $42 million. What is the expected internal rate of return (IRR) for these capital expenditures? (Assume a 10-year period for the cash flows.)