question 1 A-D

) Turn in a hand-written hard copy of your solutions at the beginning of class. Typewritten solutions are terrible; and no electronic submissions. 2) Show all calculations. It is not enough to just write down the answer ) Indicate units of measurement (e.g. S or "units")for all mumbers, especially final answers 4 Use fresh sheets of paper for your solutions (ruled notebook sheets are great). Don't try to write your answers on this question sheet; there isn't enough space S This assignment will be graded out of 30 points. Jill Hawkins, Chief Marketing Officer for Millennium Sporting Equipment (MSE), Inc., must decide 1) er to introduce a mid-priced version of the firm's Voyager line of high performance recreational wheth bicycles next year. The new model (V-330) would sell for $390, with unit variable cost of $180. Projection made by the product development team indicate that the V-330 would achieve a sales volume of 50,000 units next year, its first year of commercialization. Sixty percent of the V-330's first year's sales volume is e from competitors' products and market growth, and the remaining 40 percent from two models currently sold by MSE-60 percent from the higher-priced V-660 model (which sells for $590 with unit variable cost of $220) and 40 percent from the economy-priced V-220 (priced at $250 with unit variable cost of $120). If V-330 is not introduced, sales of the existing models next year are expected to be 40,000 units for V-660 and 60,000 units for V-220. The fixed costs of launching V-330 have been forecast to be $3 million. ) What is the cannibalization rate? (1 point) b) How many units each of V-220 and V-660 will be cannibalized? (2 points) c) How many incremental units of V-330 will be sold? (1 point) d) Should Ms. Hawkins add the V-330 model to the product line? Why? (6 points) 2) Planet Fitness, Inc. is a franchisor and operator of fitness centers in 50 states, the District of Columbia, Puerto Rico, Canada, the Dominican Republic, Panama and Mexico. The company is well-known for its $10 membership fees, although customers can also sign up for a more expensive $21.99 PF Black Card membership that comes with additional perks. Data analytics website Second Measure estimates that Plant Fitness's customer retention rate is 66%. As of September 30, 2018, the company had 12.2 million members. Assume that 80% of these signed up for the basic $ 10 membership and the remaining 20% signe up for PF Black Card membership. Furthermore, assume that Planet Fitness incurs a variable cost of S1.50 per basic membership customer and $5.00 per PF Black Card customer. Planet Fitness's average weighted cost of capital (ie, the interest rte it pays to borrow money) is around 6.8%, a) What is the customer lifetime value (CI V of a customer with Pp Rl to Guru Focus ack Card