Stanley Black & Decker, Inc. is considering adding a boombox/jobsite radio to its product line...
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Stanley Black & Decker, Inc. is considering adding a boombox/jobsite radio to its product line to compete with the DeWalt boombox. Currently the DeWalt boombox sells for $249. Management of Stanley Black & Decker, Inc. believes that in order to penetrate the market, the boombox/jobsite radio cannot be priced above $199. The company requires a minimum return of 20% on its investments. Launching the new product would require an investment of $4,000,000. Sales are expected to be 10,000 units of the boombox/jobsite radio per year. Required: Compute the target cost of a boombox/jobsite radio. What does this target cost mean for Stanley Black & Decker, Inc.?
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