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Binghamton Kitchen Appliances is planning to produce an oven. The variable cost for this oven will be $200 while annual fixed costs of $300,000 are
Binghamton Kitchen Appliances is planning to produce an oven. The variable cost for this oven will be $200 while annual fixed costs of $300,000 are expected for production and marketing. Market research has estimated that at a price of p dollars, the demand for the oven would be (20,000,000)p-1.5. a. What is the breakeven price? b. What is the price that maximizes profit? (For convenience, assume that it varies in multiples of $50.) c. If the unit variable cost varies between 200 and 260 in multiple of 10, determine the best price for each. d. Now consider multiple-year cash flows. Suppose that Binghamton Kitchen Appliances incurred an R
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