As an owner of your own company, you are considering three mutually exclusive alternatives to increase your revenue and eventual profit a. Alternative one requires an investment of $20,000 and results in a net revenue of $2.00 per unit sold b. Alternative two requires an investment of $50,000 and results in a net revenue of $3.00 per unit sold c. Alternative three requires no initial investment but the first 5,000 units will have a net loss of $2.00 per unit then a net revenue of $1.00 per unit sold Assume you believe that you can sell between 10,000 and 30,000 units total. What should you do? Show your work analytically and graphically and make recommendations and explain your recommendation based on your analysis.
As an owner of your own company, you are considering three mutually exclusive alternatives to increase your revenue and eventual profit a. Alternative one requires an investment of $20,000 and results in a net revenue of $2.00 per unit sold b. Alternative two requires an investment of $50,000 and results in a net revenue of $3.00 per unit sold c. Alternative three requires no initial investment but the first 5,000 units will have a net loss of $2.00 per unit then a net revenue of $1.00 per unit sold Assume you believe that you can sell between 10,000 and 30,000 units total. What should you do? Show your work analytically and graphically and make recommendations and explain your recommendation based on your analysis.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:As an owner of your own company, you are considering three mutually exclusive
alternatives to increase your revenue and eventual profit
a. Alternative one requires an investment of $20,000 and results in a net revenue
of $2.00 per unit sold
b. Alternative two requires an investment of $50,000 and results in a net revenue
of $3.00 per unit sold
c. Alternative three requires no initial investment but the first 5,000 units will have
a net loss of $2.00 per unit then a net revenue of $1.00 per unit sold
Assume you believe that you can sell between 10,000 and 30,000 units total. What
should you do? Show your work analytically and graphically and make
recommendations and explain your recommendation based on your analysis.
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