A softdrink company currently has two products – OldCola and BoringCola. It is planning on launching a new drink, CoolaCola. Explain whether and why the following be included in an NPV analysis
a. $10,000 for market research that has already been done to determine the demand for CoolaCola.
b. $10,000 for marketing after CoolaCola is launched.
c. Interest on a long-term bank loan that the company will take out to pay for manufacture of CoolaCola.
d. Lost sales due to existing customers switching from buying BoringCola to CoolaCola
e. The company currently has a building that it rents to another company. They will need to ask the current tenants to leave because they will need the building to store CoolaCola inventory.
f. The company will lose $5,000 per month in rent from the tenants.
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