Posted by **liza** on Thursday, November 18, 2010 at 12:29pm.

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.

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