Question
Kims Publishing Ltd is evaluating the feasibility of printing and manufacturing the genre of fiction books. The company is looking to realize quick profits in
Kims Publishing Ltd is evaluating the feasibility of printing and manufacturing the genre of fiction books. The company is looking to realize quick profits in the first year with the addition of printing and manufacturing fiction books. The companys manufacturing facility has the capacity to produce 800,000 fiction-genre books in the first year. Fixed costs associated with this potential addition are $2 million and the maximum selling price that the market will tolerate is $8 per book. If variable costs are 45% of the selling price, should Kim pursue the idea of adding the genre of fiction books and do further market analysis? Why or why not?
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