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Suppose that a food processor is developing a new product that requires an upfront investment of $90,000. In addition, there is an anticipated fixed cost
Suppose that a food processor is developing a new product that requires an upfront investment of $90,000. In addition, there is an anticipated fixed cost per year of $23,500 for producing the new product. Suppose that marginal cost is $4.2 (this is the per-unit cost). Assume that the budgeted sales are 50,000 units per year. Assume that the expected life of the product is four years. What is the cost-plus price if you choose a mark-up of 20%
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