Loyola International, Inc

question 32

Essay

Loyola International, Inc. is considering adding a portable CD player to its product line. Management believes that in order to be competitive, the CD player cannot be priced above $79. The company requires a minimum return of 20% on its investments. Launching the new product would require an investment of $20,000,000. Sales are expected to be 250,000 units of the CD player per year.
Required:
Compute the target cost of a CD player.

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Definitions:

Buffer

In communication, a buffer is a neutral or positive statement used to soften the impact of negative information or to ease into a difficult topic.

Spotlight

A feature or attention focused intently on someone or something, highlighting them in a significant or prominent way.

Indirect Strategy

A communication tactic wherein the main point or objective is introduced after the provision of background information or arguments, often utilized to prepare the audience for the message.

Hostile Reaction

A negative response or opposition encountered usually as a result of an action taken or a proposal made.