A Small Computer Manufacturer Wants to Price Its Product to Earn

question 150

Essay

A small computer manufacturer wants to price its product to earn a return of 60% on equity before interest and taxes. The computer has technological advantages that make management certain they can sell the firm's maximum production of 60,000 units per year at any reasonable price. The variable cost to build and sell a computer is $800, fixed costs are $5,500,000 per year and the firm has $9,000,000 in its equity account.

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Definitions:

Homeownership

The state or condition of owning a home, often considered a key aspect of the American dream, symbolizing stability and economic prosperity.

Civil Rights Act

Legislation passed in the United States aimed at ending discrimination based on race, color, religion, sex, or national origin.

Racial Makeup

The composition or distribution of races within a particular population or area.

Majority-white Small Towns

Small towns or communities where the majority of the population is of White or Caucasian descent, often homogeneous in demographic makeup.