Baldwin Cycle Company Case study

1. What is the expected added profit from the Challenger line?

2. What is the expected impact of cannibalization of existing sales?

3. What costs will be incurred on a one-time basis only?

4. What are the additional assets and related carrying costs?

5. What is the overall impact on the company in terms of (a) profits, (b) return on sales, (c) return on assets, and (d) return on equity?

6. What are the strategic risks and rewards?

7. What should Ms. Leister do? Why?