Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. 28. cantor's has been busy analyzing a new product

28. Cantor's has been busy analyzing a new product. Thus far, management has determined that...

70.2K

Verified Solution

Question

Accounting

image
image
28. Cantor's has been busy analyzing a new product. Thus far, management has determined that an OCF of $218,200 will result in a zero net present value for the project, which is the minimum requirement for project acceptance. The fixed costs are $329,000 and the contribution margin per unit is $211. The company feels that it can realistically capture 2.5 percent of the 110,000 unit market for this product. The tax rate is 34 percent and the required rate of return is 11 percent. Should the company develop the new product? Why or why not? . Yes; The project's required rate of return exceeds the expected IRR. 3. Yes; The expected level of sales exceeds the required level of production. . No; The required level of production exceeds the expected level of sales. . No; The IRR is less than the required rate of return. .No; The project will never payback on a discounted basis. 9

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students