Vanguard Corp

question 40

Multiple Choice

Vanguard Corp. uses target return pricing and is hoping to earn a 20 percent return on its investment of $1 million during the coming year. Vanguard sold 30,000 units last year and hopes the same quantity will be sold this year. If Vanguard has fixed costs of $250,000 and variable costs of $10 per unit, what price should the firm set to achieve its target return?

• A) $58.30
• B) $60.00
• C) $20.00
• D) $30.00
• E) $25.00

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Definitions:

Presentment

The act of formally presenting a financial document, such as a check or draft, for acceptance or payment.

Discharge

The release from a legal obligation, such as the fulfillment of a debt or contractual requirement.

Individual

A single human being distinct from a group, class, or family.

Instrument

An instrument is a legal document that formally records or grants a right, like contracts, wills, or deeds.