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 B D 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 3.25 years Expected product life in years 2 years 2.5 years 3 years 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. Product D O Product A O Product B O Product C

Elements Of Electromagnetics
7th Edition
ISBN:9780190698614
Author:Sadiku, Matthew N. O.
Publisher:Sadiku, Matthew N. O.
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10A
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
B
D
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
3.25 years
Expected product
life in years
2 years
2.5 years
3 years
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.
Product D
O Product A
O Product B
O Product C
Transcribed Image Text: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 B D 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 3.25 years Expected product life in years 2 years 2.5 years 3 years 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. Product D O Product A O Product B O Product C
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