Base Line, Inc. makes tennis balls. The company can produce up to 500,000 cans of balls per year. Current annual production is 450,000 cans. Annual fixed costs total $150,000. The variable cost of making and selling each can of balls is $0.75 Owners expect a 15% annual return on the company's $1,000,000 in assets.Base Line currently operates in a highly competitive environment. The current market price for a can of balls produced by manufacturers similar to Base Line is $1.45. Base Line has hired a marketing agency to help it gain more control over its sales price. The agency's fee for developing the advertising campaign is $79,496.

Assuming sales volume and other costs will not be affected by the advertising campaign, what would Base Line's cost plus price be?

A.

$1.59

B.

$0.93

C.

$1.45

D.

$1.43

E.

$1.42