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Zeta Automotive Company is developing a new electric car. The company estimates that the target selling price for the car is SAR 50,000. If the

Zeta Automotive Company is developing a new electric car. The company estimates that the target selling price for the car is SAR 50,000. If the desired profit margin is 20% of the selling price, calculate the target cost per unit. Determine whether the estimated target cost per unit is feasible based on current cost estimates of SAR 40,000 per unit.

Requirements:

  • Calculate the target cost per unit.
  • Determine whether the estimated target cost per unit is feasible.
  • Discuss possible actions if the target cost per unit is not feasible.

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