Case: Dr Johns Products Limited HBS 2. What are the relevant economics for this venture? a. How
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Case: Dr Johns Products Limited HBS
2. What are the relevant economics for this venture?
a. How profitable is the company? Assume an average retail selling price per unit of $6 and that retailers enjoy a 50% gross margin on the product. Assume that Spinbrush's cost of goods sold is 50% of revenue. Assume that the fully loaded, annual cost of Spinbrush's nine employees is $1.25 million, and $500K in other overhead expenses.
b. What annual sales volume is required for Dr. John's to achieve break even?
3. What (rough) valuation would you assign to Dr. John's at the time of the case?
Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-0078025655
7th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Old
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