Question
Several years ago, cosmetics manufacturer Elizabeth Arden announced its decision to cancel the launch of Elizabeth Taylor's Black Pearls perfume. This included cancelling a planned
Several years ago, cosmetics manufacturer Elizabeth Arden announced its decision to cancel the launch of Elizabeth Taylor's Black Pearls perfume. This included cancelling a planned $12 million advertising campaign that would have been required to announce the product. Distribution costs for the product were estimated at $1.7 million. They did this despite having already spent $15 million on development, marketing, and inventory.
Instead of canceling the launch and discarding the inventory, Elizabeth Arden should have gone ahead with the planned launch if the anticipated revenue from sales of existing inventory exceeded at least:
$1.7 million
$12 million
$13.7 million
$15 million
$27 million
$28.7 million
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