Question
The Gillette company is considering introducing a new five-blade razor called Venus Embrace in the market. The company plans to manufacture and sell 15 million
The Gillette company is considering introducing a new five-blade razor called Venus Embrace in the market. The company plans to manufacture and sell 15 million units of Venus Embrace a year. The investment at time 0 that is required to building the manufacturing plant is estimated as $415 million, and the economic life of the project is assumed to be 10 years. The annual total operating expenses, including manufacturing costs and overheads, are estimated as $70 million. The salvage value that can be realized from the project is estimated as $120 million. If the companys MARR is 20%, determine the minimum price that Gillette should charge for a Venus Embrace razor. (Do not consider any income tax effect).
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