A New Product, an Automated Crepe Maker, Is Being Introduced

question 6

Multiple Choice

A new product, an automated crepe maker, is being introduced at Miyake Corporation. At a selling price of $73 per unit, management projects sales of 20,000 units. Launching the crepe maker as a new product would require an investment of $400,000. The desired return on investment is 17%. The target cost per crepe maker is closest to:

• A)$69.60
• B)$85.41
• C)$81.43
• D)$73.00

---

Definitions:

Renovate

The process of restoring or improving a building, room, or structure to make it more attractive, functional, or to bring it up to current standards.

Marginal Product Curve

A graphical representation showing how the addition of a single unit of resource alters the total output of a good or service.

Total Product

The total output of goods and services produced by a firm or industry over a specific period.

Marginal Product

The additional output that is produced by using one more unit of a particular input, holding all other inputs constant.