Title Page Executive Summary: Findings most relevant to the decision maker, issues addressed conclusions, recommendations, and their reasons. The profit-generating Super project may come from the incremental cost of the excess agglomerator capacity. Payback period is a method used to determine how much time is needed to recover initial investment of a project.
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What are the relevant cash flows for General Foods to use in evaluating the Super project? Should General Foods proceed with the project? Since we also believe this a mature market, it is a cost that seems to be irrelevant in this analysis.
Also, it fails to account for any incremental overhead costs and income-tax-reducing depreciation on the income statement; therefore it doesnt recognize all cash flows.
So, the allocation of charges for excess agglomerator capacity should be included. The WACC for the super project is Crosby Sanberg, a manager of financial analysis at General Food Corporation calculated return on investment in three different ways of on Super Project.
Overhead expenses included manufacturing costs plus selling and general and administrative costs on a per unit basis equivalent to Jell-O. Although, the Super Project is expected to increase cash flow, it is expected to decrease in cash flow due to erosion of Jell-O product lines.