Financial Analysis Scenario

Drone Innovations, Inc. $($DII$)$ is a local drone manufacturer that is planning to launch a new drone that uses solar technolygy which will allow the drone to fly $100$ times farther and $100$ times longer than any existing drone on the market. Cost of research and development is $$3,500,000$ and the drone market size is currently measured at $4,000,000$ of which DII currently serves $50\%.$

Newspaper advertising will carry a coupon that will entitle the consumer to receive $$20\mathrm{.}00$ off the price of each drone purchased. Research has shown that $50\%$ of customers will redeem the coupon. $($Hint: coupon redemption is a variable cost$).$ The cost of the newspaper advertising $($excluding coupon returns$)$ will be $$500,000.$ Other fixed costs will be $$2$ million per year. The cost to produce each drone at $$30.$ The finding of several research studies has determined that consumers would be willing to pay $$100$ for each drone at which the retail selling price would be targeted. The retailer's margin is $25\%$ and the wholesaler's margin is $15\%.$

a$.$ What is the company's breakeven in units?

b$.$ What is the company's breakeven in dollars?

c$.$ What is the company's breakeven share of market as a percentage?