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can someone please solve this without subtracting cannibalization cost. And then show how they calculate cannibalization cost, thank you :) Example: Company X introduced a
can someone please solve this without subtracting cannibalization cost. And then show how they calculate cannibalization cost, thank you :)
Example: Company X introduced a new product and sold 406,000 units in year 1. The marketing forecasting team predicted that 30% of these sales came from existing customers that switched from buying an existing product to the new one. The contribution margin for the existing product is $6.45 per unit. Price of new product: $70 Variable cost of new product: $64.70 Fixed cost : $1,400,000 / year How much profit did the new product contribute to the company's bottom line ? = Profit Impact = Unit Contribution x Units Sold Fixed Costs - Cannibalization CostStep by Step Solution
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