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Grade this assignment out of 35. Question: Based on all the data you have on hand, what is your recommended price for the new product?
Grade this assignment out of 35. Question: Based on all the data you have on hand, what is your recommended price for the new product? -Show the background financial analysis -Explain the underlying rationale for your chosen price Answer: The recommended price for the new product is $499. Below is the background financial analysis: Atlas's cost to manufacture each gearbox is $329. Atlas's markup is 48%, which means that the distributor's cost is $329 + ($329 * 0.48) = $491.52. The distributor's markup is 32%, which means that the customer's cost is $491.52 + ($491.52 * 0.32) = $649.36. Reliable's manufacturing cost per gearbox is $188. Reliable's markup is 30%, which means that the customer's cost is $188 + ($188 * 0.30) = $244.40. Rationale: The price of $499 is competitive with Reliable's price of $244.40, but it also allows Atlas to cover its manufacturing costs and make a profit. The price is also lower than the customer's cost for Atlas's product if purchased through a distributor, which makes it more attractive to Mid-west. The price also takes into account the volume of gearboxes that Mid-west will need for its windmills. With 1,350 windmills making 40 million rotations each per
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