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Talahasy Corporation operates a commercial nursery where it propagates plants for garden centers throughout the region. Lowry has $10,000,000 in assets. Its yearly fixed costs
Talahasy Corporation operates a commercial nursery where it propagates plants for garden centers throughout the region. Lowry has $10,000,000 in assets. Its yearly fixed costs are $1,000,000 and the variable costs for the potting soil, container, label, seedling, and labor for each gallon size plant total $2.00. Lowrys volume is currently 800,000 units. Lowry offers the plants to garden centers for $6.00 each. Garden centers then mark them up to sell to the public for $12 to $15, depending on the type of plant. a) Lowry's owners want to earn a 15% return on the company's assets. What is Lowry's target profit? b) Given Lowry's current costs, will its owners be able to achieve their target profit? c) If the target profit is not met, what are possible actions for Lowry to take
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