Posted by liza on .
A company wants to invest in a new advertising program. Using the NPV method of capital budgeting, determine the proposal’s appropriateness and economic viability with the following information:
• The new program will increase current sales, $10 million, by 20%.
•The new program will have a profit margin is 5% of sales.
• The new program will have a 3-year effect.
•The new program will cost the company $200,000 in the first year.