The following financial information is available for the analysis: Current sales revenue for Product A: R2,000,000
Question:
The following financial information is available for the analysis:
• Current sales revenue for Product A: R2,000,000
• Current sales revenue for Product B: R1,500,000
• Expected sales revenue for Product C (first year): R1,000,000
• Research and development costs for Product C: R500,000
• Production Equipment Costs for Product C: R1,200,000
• Marketing costs for Product C: R300,000
• Expected variable costs for Product A: 70% of sales revenue
• Expected variable costs for Product B: 60% of sales revenue
• Expected variable costs for Product C: 65% of sales revenue
• Fixed costs (overheads) for the entire business: R800,000
• Investment cost for Product A = R1,000,000
• Investment cost for Product B = R900,000
Evaluate ROI, NPV, and payback period for each product?
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer