Your firm and 2 competitors share a niche market producing outdoor heaters. You are considering launching a new model called "Pretty darn hot" in addition to your two existing products, Cozy I and Cozy II.Your competitors currently sell the "Not too warm, not too cold" and "Australian Winter" models. Current sales (which are assumed to continue in the absence of new product launches) and expected sales whenthe new product enters the market are depicted in the table below (numbers in thousands $):ProductCurrent Period SalesExpected Period Sales"Cozy I"14.614.0"Cozy II"23.819.9"Pretty darn hot"26.2"Not too warm, not too cold"96.883.6"Australian Winter"40.537.0What are the incremental sales that you should consider when evaluating the new model (in $'000)?(Give your answer in thousands accurate to 2 decimal places)

Answered: Your firm and 2 competitors share a…

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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Can you help me answer this with a step by step explanation and display any formulas used.? There is a firm, which we are prospecting as a purchase candidate. It has the following features we find attractive. First, it will enable us to sell to the clients of this firm what we already are selling our existing clients. The revenue addition will be $12 million. However, it will induce $3 million more expenses in attaining that higher level of revenue. Secondly, it will enable us to sell a division of the firm that does not rally connect with our operations for $5 million. Thirdly, since there is a lot of repetition of positions ( we are in the same line of business) we can lay off 50 employees permanently. The average salary of those employees is $60,000. The coc of the firm is 10%. Calculate the amount that we can bid to acquire this company.
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