Parts A and B Piscataway valves decided to pursue development of a new product line for natural gas pipelines. The development effort has been successful and Piscataway is preparing to begin manufacturing and marketing the new product line next year. Piscataway has learned that marketing to natural gas pipeline companies requires commercial skills and experience they do not have. Management has, as a consequence, decided to have a partner and are in serious discussions with two companies having the requisite marketing expertise: Fargo Pipeline Supplies (FPS) and Quantum International (QI) Note: For this question, all cash flows are incremental cash flows. Part A: FPS Proposal FPS would provide only marketing, sales, and distribution for natural gas pipeline valves. $7,465 in Year 0 Piscataway would have to invest in faciliites to manufacture the valves, spending Piscataway would have to invest in faciliites to manufacture the valves, manufacture the valves themselves, and incur administrative expenses. Total cash-out fillow for these are as shown below.
Parts A and B Piscataway valves decided to pursue development of a new product line for natural gas pipelines. The development effort has been successful and Piscataway is preparing to begin manufacturing and marketing the new product line next year. Piscataway has learned that marketing to natural gas pipeline companies requires commercial skills and experience they do not have. Management has, as a consequence, decided to have a partner and are in serious discussions with two companies having the requisite marketing expertise: Fargo Pipeline Supplies (FPS) and Quantum International (QI) Note: For this question, all cash flows are incremental cash flows. Part A: FPS Proposal FPS would provide only marketing, sales, and distribution for natural gas pipeline valves. $7,465 in Year 0 Piscataway would have to invest in faciliites to manufacture the valves, spending Piscataway would have to invest in faciliites to manufacture the valves, manufacture the valves themselves, and incur administrative expenses. Total cash-out fillow for these are as shown below.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter14: The Balanced Scorecard And Corporate Social Responsibility
Section: Chapter Questions
Problem 2PA: Strategic initiatives and CSR Get Hitched Inc. is a production company that is in the process of...
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