We have to get this new product and fast’, said the Operations Director. ‘Our competitors are close behind us and I believe their products will be almost as good as ours when they launch them’. She was talking about a new product that the company hoped would establish them as the leader in the market. The company had put together a special development team together with their own development laboratory. They had spent £10,000 on equipping the laboratory and the cost of the development engineers would be £20,000 per quarter. It was expected that the new product would be fully developed and ready for launch within six quarters. It would be so through a specialist agency that charged £10,000 per quarter and would need to be in place two quarters prior to the launch. If the company met their launch date it was expected that they could charge a premium price that would result in profits of approximately £50,000 per quarter. Any delay in the launch would result in profits being reduced to £40,000 per quarter. If this development project were delayed by two quarters how far would the break-even point for the project be pushed back?

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While finishing ontime Initial cost 10000 Cost of the engineers 20... View the full answer