Jasmine s Dresswear Manufacturers is preparing a strategy for the fall season. One alternative is to expand
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Question:
Jasmines 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 highquality 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 Expand Wool Sweaters Line Enter Cashmere Sweaters Line
Probability Present Value of Cash Flows from Sales Probability Present Value of Cash Flows from Sales
Fantastic $ $
Moderate
Low
The initial cost to expand the wool sweater line is $ To enter the cashmere sweater line, the initial cost in designs, inventory, and equipment is $
a Calculate net present value if Jasmines 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.
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