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Kingbird Inc. has been producing basketballs, volleyballs, soccer balls, and footballs for many years. Its manager, Jake, just came up with the idea to sell products in a bundle to provide more options for buyers. Jake's suggestion is to sell a bundle of balls (one of each of the four types listed, above) for $51. This represents a savings to the consumer of 15% off regular, individual prices for the items. The company has been operating within its target cost for all of these products, which have a combined total of $33 per bundle. The proposal includes a target sales volume of 10,000 bundles. (a) Your answer is correct. If Kingbird requires an ROI of 20% on its invested assets, what amount of invested assets must the company currently have? Asset base $ 900000

Kingbird Inc. has been producing basketballs, volleyballs, soccer balls, and footballs for many years. Its manager, Jake, just came up with the idea to sell products in a bundle to provide more options for buyers. Jake's suggestion is to sell a bundle of balls (one of each of the four types listed, above) for $51. This represents a savings to the consumer of 15% off regular, individual prices for the items. The company has been operating within its target cost for all of these products, which have a combined total of $33 per bundle. The proposal includes a target sales volume of 10,000 bundles. (a) Your answer is correct. If Kingbird requires an ROI of 20% on its invested assets, what amount of invested assets must the company currently have? Asset base $ 900000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Kingbird Inc. has been producing basketballs, volleyballs, soccer balls, and footballs for many years. Its manager, Jake, just came up with the idea to sell products in a bundle to provide more options for buyers. Jake's suggestion is to sell a bundle of balls (one of each of the four types listed, above) for $51. This represents a savings to the consumer of 15% off regular, individual prices for the items. The company has been operating within its target cost for all of these products, which have a combined total of $33 per bundle. The proposal includes a target sales volume of 10,000 bundles. (a) Your answer is correct. If Kingbird requires an ROI of 20% on its invested assets, what amount of invested assets must the company currently have? Asset base $ 900000
Transcribed Image Text:Kingbird Inc. has been producing basketballs, volleyballs, soccer balls, and footballs for many years. Its manager, Jake, just came up with the idea to sell products in a bundle to provide more options for buyers. Jake's suggestion is to sell a bundle of balls (one of each of the four types listed, above) for $51. This represents a savings to the consumer of 15% off regular, individual prices for the items. The company has been operating within its target cost for all of these products, which have a combined total of $33 per bundle. The proposal includes a target sales volume of 10,000 bundles. (a) Your answer is correct. If Kingbird requires an ROI of 20% on its invested assets, what amount of invested assets must the company currently have? Asset base $ 900000
(b) Your answer is correct. If Kingbird recognizes that it will need to invest in at least two new pieces of equipment (at a total cost of $131,000) in the coming year to facilitate this bundling process, what will be the new target cost per unit? (Round answer to 2 decimal places, e.g. 15.25.) New target cost per unit $ Show Transcribed Text Your Answer Correct Answer * Your answer is incorrect. ROI If Kingbird finds that it has to drop its target selling price to $51.00 to really promote this bundle, what ROI will the company earn, incorporating the new target cost per unit from part (b)? (Round answer to 2 decimal places, e.g. 15.25%.) 30.38 19.03% %
Transcribed Image Text:(b) Your answer is correct. If Kingbird recognizes that it will need to invest in at least two new pieces of equipment (at a total cost of $131,000) in the coming year to facilitate this bundling process, what will be the new target cost per unit? (Round answer to 2 decimal places, e.g. 15.25.) New target cost per unit $ Show Transcribed Text Your Answer Correct Answer * Your answer is incorrect. ROI If Kingbird finds that it has to drop its target selling price to $51.00 to really promote this bundle, what ROI will the company earn, incorporating the new target cost per unit from part (b)? (Round answer to 2 decimal places, e.g. 15.25%.) 30.38 19.03% %
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