Question
In: Accounting
Maize Water is considering introducing a water filtration device for its 20-ounce water bottles
Maize Water is considering introducing a water filtration device for its 20-ounce water bottles. Market research indicates that 1,000,000 units can be sold if the price is no more than $3. If Maize Water decides to produce the filters, it will need to invest $2,000,000 in new production equipment. Maize Water requires a minimum rate of return of 15% on all investments. Determine the target cost per unit for the filter. (Round answer to 2 decimal places, e.g. 10.50.)
Target cost per unit = $_______
Solutions
Expert Solution
Calculate target cost per unit
target cost per unit = Target price-Desired profit per unit
= 3-(2000000*15%/1000000)
Target cost per unit = 2.70 per unit
ekkarill92 answered 2 years agoRelated Solutions
Clear Water is considering introducing a water filtration device for its one-litre water bottles
Clear Water is considering introducing a water filtration device
for its one-litre water bottles. Market research indicates that
1,000,000 units can be sold if the price is no more than $3. If
Clear Water decides to produce the filters, it will need to invest
$2,200,000 in new production equipment. Clear Water requires a
minimum rate of return of 20% on all investments.Determine the target cost per unit for the
filter.Target cost per unit = $_______
As a special promotion for its 20-ounce bottles of soda, a soft drink company printed a...
As a special promotion for its 20-ounce bottles of soda, a soft
drink company printed a message on the inside of each cap. Some of
the caps said, “Please try again,” while others said, “You’re a
winner!” The company advertised the promotion with the slogan “1 in
6 wins a prize.” Suppose the company is telling the truth and that
every 20-ounce bottle of soda it fills has a 1-in-6 chance of being
a winner. Seven friends each buy one...
A soft drink company printed messages inside its? 20-ounce bottles as part of a promotion. Some...
A soft drink company printed messages inside its? 20-ounce
bottles as part of a promotion. Some of the caps said? “Please try?
again!” while others? said, “”You’re a? winner!” The company claims
that 1 in 6 bottles have winning caps. Seven friends each buy a
bottle at a grocery store. The clerk is surprised when three of
them win a prize. Is this group of friends just lucky or is the?
company’s claim? inaccurate? Use simulation to estimate the
probability...
#20 Caspian Sea Drinks is considering the purchase of a new water filtration system produced by...
#20 Caspian Sea Drinks is considering the purchase of a new
water filtration system produced by Rube Goldberg Machines. This
new equipment, the RGM-7000, will allow Caspian Sea Drinks to
expand production. It will cost $15.00 million fully installed and
will be fully depreciated over a 20 year life, then removed for no
cost. The RGM-7000 will result in additional revenues of $3.67
million per year and increased operating costs of $579,799.00 per
year. Caspian Sea Drinks' marginal tax rate...
Aerotron Electronics is considering the purchase of a water filtration system to assist in circuit board...
Aerotron Electronics is considering the purchase of a water
filtration system to assist in circuit board manufacturing. The
system costs $80,000. It has an expected life of 7 years at which
time its salvage value will be $7,500. Operating and maintenance
expenses are estimated to be $2,000 per year. If the filtration
system is not purchased, Aerotron Electronics will have to pay Bay
City $12,000 per year for water purification. If the system is
purchased, no water purification from Bay...
A. Caspian Sea Drinks is considering the purchase of a new water filtration system produced by...
A. Caspian Sea Drinks is considering the purchase of a new water
filtration system produced by Rube Goldberg Machines. This new
equipment, the RGM-7000, will allow Caspian Sea Drinks to expand
production. It will cost $15.00 million fully installed and will be
fully depreciated over a 15 year life, then removed for no cost.
The RGM-7000 will result in additional revenues of $3.08 million
per year and increased operating costs of $789,667.00 per year.
Caspian Sea Drinks' marginal tax rate...
A. Caspian Sea Drinks is considering the purchase of a new water filtration system produced by...
A. Caspian Sea Drinks is considering the purchase of a new water
filtration system produced by Rube Goldberg Machines. This new
equipment, the RGM-7000, will allow Caspian Sea Drinks to expand
production. It will cost $12.00 million fully installed and will be
fully depreciated over a 20 year life, then removed for no cost.
The RGM-7000 will result in additional revenues of $2.72 million
per year and increased operating costs of $644,288.00 per year.
Caspian Sea Drinks' marginal tax rate...
Caspian Sea Drinks is considering the purchase of a new water filtration system produced by Rube...
Caspian Sea Drinks is considering the purchase of a new water
filtration system produced by Rube Goldberg Machines. This new
equipment, the RGM-7000, will allow Caspian Sea Drinks to expand
production. It will cost $14.00 million fully installed and will be
fully depreciated over a 15 year life, then removed for no cost.
The RGM-7000 will result in additional revenues of $3.25 million
per year and increased operating costs of $620,226.00 per year.
Caspian Sea Drinks' marginal tax rate is...
Caspian Sea Drinks is considering the purchase of a new water filtration system produced by Rube...
Caspian Sea Drinks is considering the purchase of a new water
filtration system produced by Rube Goldberg Machines. This new
equipment, the RGM-7000, will allow Caspian Sea Drinks to expand
production. It will cost $12.00 million fully installed and will be
fully depreciated over a 15 year life, then removed for no cost.
The RGM-7000 will result in additional revenues of $3.19 million
per year and increased operating costs of $751,841.00 per year.
Caspian Sea Drinks' marginal tax rate is...
Caspian Sea Drinks is considering the purchase of a new water filtration system produced by Rube...
Caspian Sea Drinks is considering the purchase of a new water
filtration system produced by Rube Goldberg Machines. This new
equipment, the RGM-7000, will allow Caspian Sea Drinks to expand
production. It will cost $12.00 million fully installed and will be
fully depreciated over a 15 year life, then removed for no cost.
The RGM-7000 will result in additional revenues of $2.87 million
per year and increased operating costs of $790,526.00 per year.
Caspian Sea Drinks' marginal tax rate is...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- How does the rotating membership of the FOMC work? Why does the president of New York's...
- A gym owner is considering opening a location on the other side of town. The new...
- a) What is the difference between resonance and non-resonance Raman transitions? b) What is the difference...
- 1. Why do most leases have expensive cancellation provisions? Does the existence of this provision shift...
- The requirements for your assignment are: Decode the IP address 172.16.31.255 /20 Determine the following: Subnet...
- Examine the various types of contracts available to Toyota when dealing with international suppliers and advise...
- Problem 10-08 NPVs, IRRs, and MIRRs for Independent Projects Edelman Engineering is considering including two pieces...
ADVERTISEMENT