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Erosion costs. Fat Tire Bicycle Company currently sells 38,000 bicycles per year. The current bike is a standard balloon-tire brike selling for $110, with a
Erosion costs. Fat Tire Bicycle Company currently sells 38,000 bicycles per year. The current bike is a standard balloon-tire brike selling for $110, with a production and shipping cost of $35. The company is thinking of introducing an off-road bike with a projected selling price of $380 and a production and shipping cost of $250. The projected annual sales for the off-road bike are 15,000. The company will lose sales in fat-tire bikes of 10,000 units per year if it introduces the new bike, however. What is the erosion cost from the new bike? Should Fat Tire start producing the off-road bike? What is the erosion cost from the new bike? S (Round to the nearest dollar.) Enter your answer in the answer box and then click Check Answer. ? part remaining Clear All Check
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