Please answer 18 A company is planning to launch a new product.It currently has four possible new products under consideration to invest in but it must select one.It has estimated the following data:ProductAExpected annual5007008501000demandUnit cost of£700£900£1000£1200productionUnit selling price£900£1300£1400£1500Fixed cost incurred£150,000£350,000£450,000£550,000before productionExpected productlife in years2 years2.5 years3 years3.25 yearsOn the basis that the main selecquantity and expected product life select the safest product to invest in.crition is the product that offers the largest safety margin between break evenO Product AProduct CO Product BProduct D

Answered: On the basis that the main selection…

On the basis that the main selection criterion is the product that offers the largest safety margin between break even quantity and expected product life select the safest product to invest in.

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter5: Probability: An Introduction To Modeling Uncertainty

Section: Chapter Questions

Problem 18P: The J.R. Ryland Computer Company is considering a plant expansion to enable the company to begin...

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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

Please answer 18

A company is planning to launch a new product.
It currently has four possible new products under consideration to invest in but it must select one.
It has estimated the following data:
Product
A
Expected annual
500
700
850
1000
demand
Unit cost of
£700
£900
£1000
£1200
production
Unit selling price
£900
£1300
£1400
£1500
Fixed cost incurred
£150,000
£350,000
£450,000
£550,000
before production
Expected product
life in years
2 years
2.5 years
3 years
3.25 years
On the basis that the main selec
quantity and expected product life select the safest product to invest in.
crit
ion is the product that offers the largest safety margin between break even
O Product A
Product C
O Product B
Product D

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