Clear View manufactures GrandPad, an inexpensive line of tablets for consumers aged 55 and above, and distributes its products through large retailers. The product line consists of three models of tablets: Model Variable Cost/Unit Selling Price/Unit (price to retailers) Demand/Year (units) Model A Model B Model $350 $500 $600 $200 $250 $280 2,000 1,000 500 Clear View is considering adding a fourth model to the product line. This model would be sold to retailers for $750. The variable cost of this unit is $450. The demand on this new Model D is estimated to be 300 units per year. Sixty percent of these unit sales of the new model are expected to come from other models already being manufactured by Clear View (10% from Model A, 30% from Model B, and 60% from Model C). Clear View will incur a fixed cost of $40,000 to add the new model to the product line. Based on the preceding data, should Clear View add the new Grandpad Model D? Explain your rationale. Add new Model D or not? Why or why not? if Model D is not added (contribution 5) Selling Price Unit Variable Cost Units Sold Contribution if Model D is added: Total unit Model D sales = 300 units Model A Model B Model Total Model D 5350 5500 $600 $200 5250 S280 2000 1000 500 3500 096 0% 096 Cannibalized sales (60% of 300) = 180 units Incremental sales (40% of 300) = 120 units If Model D is added (contribution S): Net GAIN: MINUS Fixed costs of $40,000 (ads): Net LOSS: SO $0 $0 $0 impact (percentage) #DIV/0! Q: Would you recommend the product be launched? Why or Why Not