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After doing some calculations, you estimate that launching the Cassius guitar model will reduce the projected sales of the existing Ragged Wood model by about
After doing some calculations, you estimate that launching the "Cassius" guitar model will reduce the projected sales of the existing "Ragged Wood" model by about 40%. Calculate the erosion cost if the product is launched. Calculate the incremental cash flow if the product is launched. $ If you were judging whether to accept or reject the guitar-related project discussed above, which of the following choices best describes the "correct" approach? O A. You would have chosen to make and sell the "Cassius" guitar becuase it is associated with a higher profit margin for each guitar sold than the "Ragged Wood" model. OB. You would have chosen to make and sell the "Cassius" guitar becuase it generates positive incremental cash flow for the company. O C. You would have chosen to make and sell the "Cassius" guitar becuase it generates positive EBIT for the company. OD. You would have chosen NOT to make and sell the "Cassius" guitar becuase it is associated with positive erosion costs. After doing some calculations, you estimate that launching the "Cassius" guitar model will reduce the projected sales of the existing "Ragged Wood" model by about 40%. Calculate the erosion cost if the product is launched. Calculate the incremental cash flow if the product is launched. $ If you were judging whether to accept or reject the guitar-related project discussed above, which of the following choices best describes the "correct" approach? O A. You would have chosen to make and sell the "Cassius" guitar becuase it is associated with a higher profit margin for each guitar sold than the "Ragged Wood" model. OB. You would have chosen to make and sell the "Cassius" guitar becuase it generates positive incremental cash flow for the company. O C. You would have chosen to make and sell the "Cassius" guitar becuase it generates positive EBIT for the company. OD. You would have chosen NOT to make and sell the "Cassius" guitar becuase it is associated with positive erosion costs
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