Answered step by step
Verified Expert Solution
Question
1 Approved Answer
An air-conditioning manufacturer has spent $1,500,000 on developing a new ductless AC system. The estimated market size for the ductless AC systems is 26,000 units
An air-conditioning manufacturer has spent $1,500,000 on developing a new ductless AC system.
The estimated market size for the ductless AC systems is 26,000 units in 2017, and is expected to grow at an annual rate of 10% over the next 4 years.
The firm predicts that with this new product, it will obtain a market share of 3% in 2017, 5% in 2018, 10% in 2019, and 15% in 2020.
The variable cost of manufacturing each unit is $250.
Compute the cost-based price for this new system, if target profit after 4 years is $500,000.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started