Case summary: Small vehicles in Country JN is called as kei cars which achieve 55-mpg ratings. Usage of kei began as a tax and insurance break to stimulate Country JN's economy since World War II. But, the typical kei purchaser in Country JN is near 50 years of age, cause worry for Country JN's automakers concentrating just on their market. The profit margins are very less for the manufacturers. Its competitor was DL's smart car which had a profit of $108.3 million on sales of $10.7 billion in Country US last year. The two seat smart cars are sold for $13,000. Company HA's N Box holds four seat cars are priced at $16,000 making it efficient for small car minded peoples.
Characters in the case: Company DL, Company HA.
To Determine: The number of N Box Cars Company HA should sell to break even and the number of car it must sell to realize a profit margin similar to smart car.
Introduction: Profit margin typically alludes to the level of income remaining subsequent to all costs,
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