Abitibi Pulp Ltd $\bullet$ Marketing Analysis Indicates Technology Companies in Silicon Valley Will Buy

question 80

Essay

Abitibi Pulp Ltd.is considering a new product line for its existing table business.It has developed a new type of computer table that will protect the computer during an earthquake.It would like you to analyze the feasibility of the venture and suggest a break-even bid price.It provides you with the following details:
$\bullet$ Marketing analysis indicates technology companies in Silicon Valley will buy 250 tables each year for four years.
$\bullet$ The consultant who did the marketing research charged a fee of $15,000.
$\bullet$ The firm estimates that the variable cost per table is $100.For this project the firm would require extra factory space at a cost of $25,000 per year, overhead costs such as heating and lighting would amount to $4,000 per year, and wages and salaries would total $75,000 per year.
$\bullet$ The machinery required for the new product line would cost $200,000, and have a salvage value of $50,000 at the end of 4 years.The machinery belongs to CCA class 16 and has a 15% declining balance rate.The asset class will remain open and the half-year rule will apply in the first year.
$\bullet$ Additional working capital of $150,000 would be required to get the project started.
$\bullet$ The corporate tax rate is 40% and the required rate of return is 12%.
What price should Abitibi charge for each table?

Understand the significance of a leader’s internal locus of control.

Recognize the role of achievement, passion, and motivation in leadership effectiveness.

Acknowledge the importance of adaptability and flexibility in leadership.

Understand the impact of humor and humility in effective leadership.

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Definitions:

Yielding Conflict Management

A conflict resolution style where one party gives in to the wishes or demands of another, often to maintain harmony or avoid further conflict.

Issue Importance

The perceived significance or relevance of an issue, affecting the attention and resources dedicated to addressing it.

Pooled Interdependence

A form of work interdependence where different groups or individuals each contribute separately to the whole without the need for tight coordination or synchronous activity.

Reciprocal Interdependence

Refers to a situation in a work process where the output of one job becomes the input for another, necessitating close coordination among participants.