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Timax Company, a manufacturer of moderately priced time pieces, would like to introduce a new electronic watch into the market. To compete effectively, the watch
Timax Company, a manufacturer of moderately priced time pieces, would like to introduce a new electronic watch into the market. To compete effectively, the watch could not be priced at more than $50. The company requires a return on investment of 25% on all new products. The plan is to produce and sell 20,000 watches each year. This would require a $500,000 investment. What would be the target cost per watch?
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