Porsche Ind. has been busy analyzing a new product. It has determined that an operating cash flow of $16,700 will result in a zero net present value, which is a company requirement for project acceptance. The fixed costs are$12,378 and the contribution margin is $6.20. The company feels that it can realistically capture 10% of the 50,000 unit market for this product. Should the company develop the new product? Why or why not?

Answer rating: 100% (QA)

Contribution 50000 units 10 5000 units 620 per unit Rs 31000 12378 fixed cost Rs 1861... View the full answer