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Questions:
Ivey Publishing Case
1. What are the relevant cash flows? In the capital budgeting analysis of this low-price, low-calorie soda project, how shall we treat:
a. ccbcbcbcbc2. Should we consider the erosion of the existing product – the regular soda – in the anlysis? Why or
why not?3. Calculate the project’s NPV, IRR, payback period, discounted payback, and profitability index.4. Perform sensitivity analyses on sales volume, price, direct labor, materials, and energy cost. What
do you observe?5. What are the benefits and risks of undertaking this project?6. Should Bebida Sol undertake this project?
