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Home / Questions / Erosion costs. Fat Tire Bicycle Company currently sells 40 comma 00040,000 bicycles per ye...

Erosion costs. Fat Tire Bicycle Company currently sells 40 comma 00040,000 bicycles per year. The current bike is a standard​ balloon-tire bike selling for ​$110110​, with a production and

Erosion costs. Fat Tire Bicycle Company currently sells 40 comma 00040,000 bicycles per year. The current bike is a standard​ balloon-tire bike selling for ​$110110​, with a production and shipping cost of ​$4040. The company is thinking of introducing an​ off-road bike with a projected selling price of ​$375375 and a production and shipping cost of ​$225225. The projected annual sales for the​ off-road bike are 13 comma 00013,000. The company will lose sales in​ fat-tire bikes of 9 comma 5009,500 units per year if it introduces the new​ bike, however. What is the erosion cost from the new​ bike? Should Fat Tire start producing the​ off-road bike?

 

May 06 2021 View more View Less

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