Analysis of Bega Cheese: Line of Yoghurt
Analysis of Bega Cheese new product line of Yoghurt
The WACC of the product range is 13.64%
Under normal conditions the NPV of the project is (-)$440,374. This means that the product is not profitable and is not recommended.
However under the best case scenario, the NPV of the project is $1,544,,565. The NPV is more than Zero and thus the investment is recommended.
Under the worst case scenario, the NPV of the project is (-)$848,924. The NPV is less than Zero and thus the investment is recommended.
The project if new product range of yoghurt is profitable only in the base case scenario. Thus the management should invest in the project only if the possibilities of best scenario are very high. Otherwise the project is not recommended as it is not profitable under normal conditions.