As Financial Analysts, has been asked to make a recommendation for current and future capital budgeting purposes. SAI is in position currently to invest in capital expenditures having navigated through the decline in revenues that followed our peak year in 2001. Our improved financial position is a result of the turnaround in the consumer electronics industry, which fueled an increase in revenue along with the successful marketing campaign. Investing in capital expenditures will solidify our presence in the industry as well as improve our market share.
             Hal Eichner has led a task force to develop possible capital expenditure projects with two goals in mind: to increase market share and to keep pace with technology. The following projects have been offered consideration:
             1. To expand existing digital market share, the Dig-image proposal, or
             2. To enter the wireless commercial market, the WComm proposal.
             Both projects were extensively analyzed to determine which alternative provided the optimum return for investors using NPV and IRR as tools in the decision making process. The analysis consisted of three steps.
             Estimates of cash flow for each proposal were prepared and market research was conducted to project market conditions, annual sales, barriers and marketing strategy. After reviewing the information provided for the Dig-image proposal our consensus was the sales forecast of 20% in years 2 and 3. In growth, we elected to be conservative estimating 10% versus the research findings of 20%. Our estimate was based on the threat of intense competition. Furthermore, we believe a price decrease is inevitable and significant marketing costs of 5% will be needed to maintain our market position.
             We were given similar information on the WComm proposal for analysis. The team believes the potential for growth is tremendous for the wireless communications model over the n
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