Taste Good Chocolates Develops a New Candy Bar and Plans

question 28

Multiple Choice

Taste Good Chocolates develops a new candy bar and plans to sell each bar for $1.Taste Good predicts that 1 million candy bars will be sold in the first year if the new candy bar is produced and sold,and includes $1 million of incremental revenues in its capital budgeting analysis.A senior executive in the company believes that 1 million candy bars will be sold,but lowers the estimate of incremental revenue to $700,000.What would explain this change?

• A) cannibalization of 300,000 of Taste Good Chocolates' other candy bars
• B) excessive marketing costs to sell the 1 million candy bars
• C) a lower discount rate
• D) a higher selling price for the new candy bars

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Definitions:

Pie Charts

A type of graph in which a circle is divided into sectors that each represent a proportion of the whole, often used to visualize the relative proportions of different categories.

Bar Graphs

A visual representation of data using bars of varying heights or lengths to show the values of different categories.

Leaf

In botany, this refers to the flat, thin plant organ specialized for photosynthesis; in data visualization, particularly in a "tree" structure, it represents an endpoint or a data point that does not branch out further.

Stem

In data visualization, the ‘stem’ refers to a part of a stem-and-leaf plot, which represents the leading digits of the data points, while the leaves represent the final digits.