A Group of Venture Investors Is Considering Putting Money into Lemma

question 7

Multiple Choice

A group of venture investors is considering putting money into Lemma Books, which wants to produce a new reader for electronic books. The variable cost per unit is estimated at $250, the sales price would be set at twice the VC/unit, fixed costs are estimated at $750,000, and the investors will put up the funds if the project is likely to have an operating income of $500,000 or more. What sales volume would be required in order to meet this profit goal?

• A) 4,513
• B) 4,750
• C) 5,000
• D) 5,250
• E) 5,513

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Definitions:

Incentive Obstacles

Challenges that arise when the incentives of different parties involved are not aligned, potentially leading to conflicts or inefficiencies.

Supply Chain Profits

The total profit or financial gain generated through the integrated activities of procuring materials, transforming them into finished goods, and delivering them to customers.

Variability

The quality of being subject to change or variance in a process or outcome, often impacting predictability and consistency.

Uncoordinated Supply Chain

A supply chain where the actions and operations of participants are not synchronized, leading to inefficiencies and potential disruptions.