As part of its growth strategy, a new product has been designed and a study carried out by a consultant to estimate the market potential and the investment required to put it into production. The analysis calls for an estimation of the relevant cash flows from the project raising questions such as measuring opportunity costs, evaluation of sunk costs and joint costs, the impact of the new product eroding sales from existing products - typical problems arising when making capital investments. Since the investment project extends over several years, a DCF analysis is necessary. Discussion needs a full class session.