Olympic Auto Supply, Inc., produces and distributes auto supplies. The company is anxious to enter the rapidly growing market for long-life batteries that is based on lithium technology. Management believes that to be fully competitive, the price of the new battery that the company is developing cannot exceed P65. At this price, management is confident that the company can sell 50,000 batteries per year. The batteries would require an investment of P2,500,000, and the desired ROI is 20%. Required: Compute the target cost of one battery.

Olympic Auto Supply, Inc., produces and distributes auto supplies. The company is anxious to enter the rapidly growing market for long-life batteries that is based on lithium technology. Management believes that to be fully competitive, the price of the new battery that the company is developing cannot exceed P65. At this price, management is confident that the company can sell 50,000 batteries per year. The batteries would require an investment of P2,500,000, and the desired ROI is 20%. Required: Compute the target cost of one battery.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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