Table 6.8 The Summerville Vitamin Company Manufactures Bottles of Animal-Shaped Chewable Vitamins

Table 6.8
The Summerville Vitamin Company manufactures bottles of animal-shaped chewable vitamins for children.This product line requires two work centers,tablet manufacturing and packaging.The tablet manufacturing work center has a current capacity of 140,000 bottles per month,and packaging is capable of 100,000 units per month.This year (year 0) ,monthly sales of the product line are expected to reach 100,000 units.Growth per month is projected at an additional 25,000 units through year 4 (i.e. ,125,000 per month in year #1,150,000 per month in year #2,etc. ) .Pre-tax profits are expected to be $5 per unit throughout the 4-year planning period.Two alternatives are being considered:
-Use the information in Table 6.8.What action,if any,should Summerville take?

A) Find another option-neither alternative provides a positive net present value after four years.
B) Select Alternative #1.
C) Select alternative #2.
D) Either alternative may be selected,since the positive net present values are the same after four years.