Question: please explain in excel and post formulas for the excel. (just as excel posted) 18. (Cash-flow analysis) The Aphrodite Company is a fume. The company
18. (Cash-flow analysis) The Aphrodite Company is a fume. The company is about to launch a new line of products. The marketing department has to decide whether to use an aggressive or regular campaign. to P 1 Aggressive campaign al cost (production of commercial advertisement using a top model): S400,000 First month profit: $20,000 Mechly growth in profit (month 2-12): 10% After 12 months the company is going to launch a new line of products and it is expected that the monthly profits from the current line would be $20,000 forever. Regular campaign Initial cost (using a less famous model): S150.000 First month profit: $10,000 Monthly growth in profits (month 2-12): 6% Monthly profit (month 13-..): $20,000 The annual cost of capital is 7%. Calculate the NPV of each campaign, and decide which campaign the company should undertake. x fx E F H A B 1 D APHRODITE PERFUME 7 Cost of capital Aggressive Regular campaign campaign 400,000 150,000 20 000 10,000 10% 6% 20,000 20.000 + Cash flow -400,000 20.000 Intial cost 5 First month proft Proft growth in months 2.12 8 Monthly profe for months 12. 2 10 Month 11 12 1 13 2 3 15 4 16 5 17 6 18 7 B 9 21 10 11 23 12 PV of Mure profits from months 24 12.fly 26 NPV 30 21
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