Robinson Rollingpin Corporation Has Variable Cost Per Unit of

question 29

Essay

Robinson Rollingpin Corporation has variable cost per unit of $.35 per $1 of sales. The firm offers a 2% discount for orders paid within 15 days if the customer increases their order size by 5%. A customer normally orders $75,000, and is considering the discount. Normally, the customer pays within 30 days with no discount. Robinson's cost of debt capital is 12%. Would Robinson be wise to offer the discount? Calculate the NPV of the decision.

Analyze how pioneer products change consumer behavior and create new markets.

Understand the challenges faced by first movers and how they establish markets.

Examine strategies for targeting innovators and early adopters to gain market acceptance.

Recognize the impact of diffusion of innovation on product life cycle.

---

Definitions:

Routine Means

Conventional or established methods of accomplishing tasks or procedures.

Organizational Structure

The system of tasks, workflows, reporting relationships, and communication channels that coordinate the efforts of an organization's members.

Organizational Culture

The shared values, beliefs, and norms that shape the social and psychological environment of a business.

Cultural Symbols

Objects, signs, icons, or practices that carry particular meanings within a culture, representing ideas or values.