• PepsiCo plans to introduce a new healthy snack line with the following financial implications:
  • Development Costs: $600 million
  • Marketing Expenses: $400 million
  • Estimated Annual Sales: $1.5 billion
  • Variable Costs: $800 million annually
  • Fixed Costs: $300 million annually

• Requirements:
  1. Calculate the break-even point in sales dollars.
  2. Prepare an income statement for the first year.
  3. Analyze the contribution margin ratio.
  4. Discuss the strategic importance of the new snack line.
  5. Evaluate the potential market risks and consumer acceptance.