Ltd., a private-label processed baby food manufacturing company based in Bengaluru, was considering investment in a new product line i.e., Wee infant milk formula. This was a major capital investment

Ltd., a private-label processed baby food manufacturing company based in Bengaluru, was considering investment in a new product line i.e., Wee infant milk formula. This was a major capital investment decision that Dr. Krishnan had to take as the company never moved beyond the existing processed baby food product line. A market study was conducted to identify the potential market size, costs and expected cash inflows associated with this new product line. Through this study, he wanted to analyze the value addition the intended capital investment would bring to his existing business. Further, he wanted to know if this new product line will cause any erosion to the sales of the existing product. This case can be used in basic finance modules at both undergraduate and post-graduate levels. Through this case, the students will assume the role of the financial manager of Neophyte India Pvt. Ltd. and assist Dr. Krishnan in the decision of investing in the infant milk formula product line. Students will be required to project future cash flows and apply capital budgeting techniques to ascertain the feasibility of investing in the new product line, Wee infant milk formula.

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