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Trout Company is considering introducing a new line of pagers targeting the preteen population. Trout believes that if the pagers can be priced competitively at $45, approximately 500,000 units can be sold. The controller has determined that an investment in new equipment totaling $4,000,000 will be required. Trout requires a minimum rate of return of 14% on all investments.

Instructions: Compute the target cost per unit of the pager. Show your calculations to receive credit for your answer.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M944008

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