Question: please post the process to get to the answer be clear thank you so much i have attached formulas Note: You MUST show all of

please post the process to get to the answer be clear thank you so much
i have attached formulas

 please post the process to get to the answer be clear
thank you so much i have attached formulas Note: You MUST show

Note: You MUST show all of your work in order for any partial credit to be given. Type your calculations and highlight answers clearly. Use the following guidelines for rounding decimals (a) percentage = one decimal point, (b) units upward to next full unit, and (c) currency - two decimal points. Drone Concepts, Inc. (DCI) manufacturers a line of drones that are distributed to large retailers. The line consists of four models of drones. The following data is available regarding the models: Variable Cost Demand/Year Model DCI Selling Price per Unit per Unit (units) Model D1- $575 $105 1.535 Model D2 $625 $180 2,865 Model D3 $775 $235 3,535 Model D4 $835 $265 3,300 Drone Concepts is considering the addition of a fifth model to its line of drones. This model would be sold to retailers for $925. The variable cost of this unit is $275. The demand for the new Model D5 is estimated to be 2,000 units per year. Fifty percent (50%) of these unit sales of the new model is expected to come from other models already being manufactured by Drone Concepts (10 percent from Model D1, 30 percent from Model D2, 40 percent from Model D3, and 20 percent from Model D4). Drone Concepts will incur a fixed cost of $750,000 to add the new model to the line. Based on the preceding data, should DCI add the new Model D5 to its line of drones? Why or why not? (Please be specific and remember to show all work CLEARLY and highlight your answer in order to receive full credit otherwise points will be deducted) Formulas to be used for this exam include: CM%= BE (units) = BE (mkt share) = (Unit Selling Price - Unit Variable Cost) Unit Selling Price Fixed Cost (Unit Selling Price - Unit Variable Cost) BE (units) Market Size CLV= $M [1/(1+i-r)]

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!