THE SUPER PROJECT

What are the relevant cash flows?
Net initial investment:
- Initial machine investment (building modifications + equipment)
- Working capital investment (cash + receivables + inventories + less current liabilities)
Cash flow from operations
(Appendix.1)

How attractive is the investment?
The new product is potential to increase General Foods' sales and earning power for many years in the future.
With the incremental costs and investment, the investment looks very attractive because Super will use the same machine as Jell-O. It would use a share of the excess capacity of Jell-O which is temporarily unused. So, the incremental cost of Super would be low. However, for a long term period, the Super project would not seem attractive anymore if the excess of Jell-O capacity did not exist. Super will disturb the production of Jell-O and need another machine investment to produce its own product.
Super was expected to get a 10% share of the total......

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Title: Super Project
Approximate Word Count: 617
Approximate Pages: 3 (250 words per double-spaced page)

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