You are a project manager deciding between two project: Project Apple and Project Banana.  Here are the project costs and expected cash flows of each project.

Part 1

You are a project manager deciding between two project: Project Apple and Project Banana.  Here are the project costs and expected cash flows of each project.

Project Apple               Project Banana

Upfront cost                            \$(100,000)                   \$(75,000)

Year 1 cash flow                          25,000                        25,000

Year 2 cash flow                          75,000                        75,000

Year 3 cash flow                        125,000                    100,000

Year 4 cash flow                        150,000                    125,000

After year 4 each project is expected to be worthless. Suppose you view each project as equally risky. Your department uses a discount rate of 10% to evaluate all projects. Use an NPV analysis to determine which project you should pursue. Complete the table below (you may set this up on a spreadsheet and copy/paste here).

 Project A Upfront CF 1 CF 2 CF 3 CF 4 Yearly CF Discounted CF NPV Project B Upfront CF 1 CF 2 CF 3 CF 4 Yearly CF Discounted CF NPV

Which project, if any, do you choose and why?:

Part 2

For this part you need to design a conjoint analysis for a product based on the FIRST LETTER of your LAST NAME as follows:

Letters “A” to “E”:                  Breakfast cereal

Letters “F” to “J”:                    Yoga mat

Letters “K” to “O”:                  Jigsaw puzzle

Letters “P” to “T”:                   Wireless charger

Letters “U” to “Z”:                  Pet carrier

Come up with THREE FEATURES (other than price!) and THREE LEVELS that you could use in your analysis. Make sure they are quantifiable! So, avoid things like “high” “low” etc. See the examples we did in class and the hotel example in the text. Complete the following table.

 Attribute 1: Attribute 2: Attribute 3: Level 1: Level 1: Level 1: Level 2: Level 2: Level 2: Level 3: Level 3: Level 3: