fm topic 6 - BWFF 2043(Group M Topic Six Cash Flow in...

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BWFF 2043 (Group M) Topic Six Cash Flow in Capital Budgeting Exercise Group 6 Name Matric No Muhammad Ikhwan Firdaus bin Ahmad Zamri 233805 Nurizzah Ashikin binti Pauzi 234008 Siti Noratikah binti Che Daud 238483 Norainaa Farahin binti Mohamad Khodori 238443 Low Yi Ling 239618 Question 2
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Winnebagel Corp. currently sells 30,000 motor homes per year at $53,000 each and 12,000 luxury motor coaches per year at $91,000 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 19,000 of these campers per year at $13,000 each. An independent consultant has determined that if Winnebagel introduces the new campers, it should boost the sales of its existing motor homes by 4,500 units per year and reduce the sales of its motor coaches by 900 units per year. What is the amount to use as the annual sales figure when evaluating this project? Why? Sales due solely to the new product line =19000($13,000) = $247,000,000 Increased sales of the motor home line occur because of the new product line introduction= 4,500($53,000) = $238,500,000
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