Accounting On the package, it claims the pozole to be 100% organic, gluten free, contain no GMOs
Question:
Accounting On the package, it claims the pozole to be 100% organic, gluten free, contain no GMO’s or animal products, and be made at facilities that only use clean energy. Pelosi is seeking Organic, Vegetarian, Vegan, Gluten Free, Non-GMO, and clean energy certifications. Getting six separate certifications will take many years and work. Pelosi has found a local Bay Area company that will do all six certifications for the bargain price of $10 million. Whole Foods has assured Pelosi that this will further legitimize her pozole, so much they guarrantee the certifications will increase the annual unit sales by 250,000 units and will then replace Sprouts as their exclusive seller. The $10,000,000 payment will be paid in year one. Assume in years 2-4 the per unit sales price will increase $3 per year, and all COGS and expenses will increase by 2.12%. E. If Pelosi choses Whole Foods with the certifications what is the sum of the cash flows at a 12.12% discount rate for years 1-4.
Accounting Tools for Business Decision Making
ISBN: 978-1118096895
6th edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso