MM Q8

NewGen Computers is considering manufacturing and launching a new solar-powered laptop. The variable cost associated with manufacturing the laptops is estimated at $f250 per unit. The fixed costs for setting up and running a production line for this product are estimated at $100,000 per year. NewGen Computers is planning to sell laptops to electronic retailers at $500 MSP (Manufacturer Selling Price). Retailers would like to make a margin of 40%on the sales of these computers. In order to promote sales, NewGen is planning to have a consumer rebate program in which it would refund 10%of the MSRP (Manufacturer Suggested Retail Price) that consumers paid when purchasing the laptop. NewGen expects that MSRP would be similar across all retail outlets and that, on an average, only 25%of consumers will actually send back a valid form and claim the rebate. There are currently three other manufacturers with similar solar-powered laptops on the market. NewGen estimates that a total of 3,000 units (all brands combined) will be sold per year