1 EEEE 21 AaBbCcDc AaBbCcDc AaBbc AaBbc T Normal 1 No Spac... Heading 1 Heading 2 Replace Select Editing Styles Paragraph 4. Weed Mart now sells two strains of marijuana that have different levels of quality. Purple which sells for $50 ounce with a variable cost of $12, and the Sour Diesel priced at $35 ounce with a variable cost of $8. The company predicts that it will sell about 20,000 pounds of Purple and 35,500 pounds of Sour Diesel next year The management team is considering the launch of a new strain called Unleaded at a lower price point of $28 ounce with a variable cost of $6. They forecast selling 15,000 pounds in the first year. Thirty percent of these sales are expected to be incremental demand, 40% is expected to come from cannibalizing Sour Diesel sales and the remaining 30% is expected to come from Purple sales. If they launch Unleaded, they will need to spend $90,000 in R&D and about $150,000 in promotion in marijuana-themed magazines. Note 16 ounces = 1 pound Please show calculations to answer the following a Should Weed Mart launch the Unleaded? [10] - b. In year two (without the Unleaded) sales of Purple are expected to increase by 30% and Sour Diesel will increase by 20%. The forecast is for 20.000 pounds of Unleaded in year two, and the cannibalization rates are expected to be 20% from the Purple and 30% from Sour Diesel They expect that promotion will cost $250,000 in year two Considering both years, should they launch it? [10] If based on the demand, they see an opportunity to increase the prices of the Purple and Sour Diesel by 5 without any effect on demand for those (so the increases mentioned in part b would still occur). but the demand for Unleaded would go up to 23.000 in the second year. Assuming the same cannabalization rates from part b (subtract from the base demand), would your decision from part b change Show calculations. [10] DFU 40F O a HE D 5 ELT Find bct Replace 1 Normal 5 No Spac... Heading 1 Heading 2 Select Paragraph Styles Editing 4. Weed Mart now sells two strains of marijuana that have different levels of quality: Purple which sells for $SO/ounce with a variable cost of $12, and the Sour Diesel priced at $35/ounce with a variable cost of $8. The company predicts that it will sell about 20,000 pounds of Purple and 35,500 pounds of Sour Diesel next year. The management team is considering the launch of a new strain called Unleaded at a lower price point of $28/ounce with a variable cost of $6. They forecast selling 15,000 pounds in the first year. Thirty percent of these sales are expected to be incremental demand, 40% is expected to come from cannibalizing Sour Diesel sales and the remaining 30% is expected to come from Purple sales. If they launch Unleaded, they will need to spend $90,000 in R&D and about $150,000 in promotion in marijuana-themed magazines. 16 ounces = 1 pound e show calculations to answer the following: 2 Should Weed Mart launch the Unleaded? [10] - b. In year two, (without the Unleaded) sales of Purple are expected to increase by 30% and Sour Diesel will increase by 20%. The forecast is for 20,000 pounds of Unleaded in year two, and the cannibalization rates are expected to be 20% from the Purple and 30% from Sour Diesel They expect that promotion will cost $250,000 in year two... Considering both years, should they launch it? [10] c. If based on the demand, they see an opportunity to increase the prices of the Purple and Sour Diesel by 5% without any effect on demand for those (so the increases mentioned in part b would still occur), but the demand for Unleaded would go up to 25,000 in the second year. Assuming the same cannibalization rates from part b (subtract from the base demand), would your decision from part b change? Show calculations. [10] a 40 O 199