8-15. Cedar Falls Menswear is considering the addition of a line of shirts and ties....
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8-15. Cedar Falls Menswear is considering the addition of a line of shirts and ties. After tax cash outlays and after tax benefits each year for the 10-year planning horizon are shown below. The required return is 10 percent, and no salvage values are anticipated. Should the company invest in ei- ther or both lines? SHIRTS TIES SHIRTS & TIES Initial outlay Annual after tax revenue Annual after tax outlays Annual net cash flow $5,000,000 6,000,000 5,000,000 $1,000,000 $1,000,000 800,000 700,000 $100,000 $5,900,000 7,000,000 5.800.000 $1.200.000
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