Business
Business, 21.01.2020 06:31, sophiaa23

Suppose orange inc. is considering a new product launch, ceo asks for your : the new project is to produce ophone 6super (just a little more expensive than current version, other than that, you can't tell the difference). it will cost $72,000 to purchase new equipment, which has a three-year life and no salvage value; depreciation is straight-line to zero. the ophone price will be sold at $500 each, no discount at any time, variable cost per unit is $200, costs would be $5,000 per year, tax rate is 35%. annual market consumption of mobile phones is 300, orange and singsong split the market, with 50% market share each. in addition, orange is filing a against singsong, if orange wins a patent verdict against singsong, lawsuit market would orange would increase its market share up to 90%, otherwise, orange's share drop to 10%. required rate of return is 15%.

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