Abel and Family Perfumes wants to add one ormore of four

Chapter 12, Problem 12.11

(choose chapter or problem)

Abel and Family Perfumes wants to add one ormore of four new products to its current line of colognes.Historically, Abel has used a 5-year projectrecovery period and a MARR of 20% per year. (a)Determine which of the four options the companyshould undertake on the basis of a present worthanalysis, provided the total amount of investmentcapital available is $800,000. Use a hand solution,unless assigned otherwise. (b) What products areselected if the investment limit is increased to$900,000? Use a spreadsheet, unless assigned otherwise.(All cash flows are in $1000 units.)Product Line R1 S2 T3 U4Investment, $ 200 400 500 700M&O cost, $/year 50 200 300 400Revenue, $/year 150 450 520 770

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