Q6. The company has traditionally used convenience stores as their preferred distribution channel to cater to...
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Q6. The company has traditionally used convenience stores as their preferred distribution channel to cater to their customers (80% of their customer are millennials). However, the new management is keen to tap on Gen Zs and has decided to use online channels of distribution, which is expected to grow at 10% annually for next 4 years, from current 1M users. The online distribution channel has a 30% profit margin. Average annual expected sales per user, from the online channel is projected to be constant at $20 for next 4 years. It is likely to cost the company $20M as an initial investment. Calculate the approximate return on investment. Year 1 2 3 4 Estimated Market share of Juice & Co., by year 10% 15% 20% 25% Q6. The company has traditionally used convenience stores as their preferred distribution channel to cater to their customers (80% of their customer are millennials). However, the new management is keen to tap on Gen Zs and has decided to use online channels of distribution, which is expected to grow at 10% annually for next 4 years, from current 1M users. The online distribution channel has a 30% profit margin. Average annual expected sales per user, from the online channel is projected to be constant at $20 for next 4 years. It is likely to cost the company $20M as an initial investment. Calculate the approximate return on investment. Year 1 2 3 4 Estimated Market share of Juice & Co., by year 10% 15% 20% 25%
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Related Book For
Intermediate Accounting Volume 2
ISBN: 9781260881240
8th Edition
Authors: Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell, Ingrid McLeod-Dick, Kayla Tomulka, Romi-Lee Sevel
Posted Date:
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