The Management of Brockington Corporation Is Considering Introducing a New

question 71

Multiple Choice

The management of Brockington Corporation is considering introducing a new product--a compact barbecue. At a selling price of $80 per unit, management projects sales of 70,000 units. Launching the barbecue as a new product would require an investment of $400,000. The desired return on investment is 15%. The target cost per barbecue is closest to:

• A)$79.14
• B)$92.00
• C)$91.01
• D)$80.00

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Definitions:

Expected Profit

The forecasted amount of profit that a business or investment is projected to earn over a specific period.

Japanese Yen

The official currency of Japan, often represented by the symbol ¥.

Risk Averse

A risk-averse individual prefers certainty over uncertainty and would opt for a guaranteed outcome over a gamble with potentially higher, yet uncertain, rewards.

Expected Rate

Often refers to the anticipated rate of return on an investment or the expected growth rate of an economic variable.