Zelda Ltd manufactures toys and games. The table below shows the costs and revenues of a toy called Dragon Mouth over the first five years of its life. Dragon Mouth is a plastic monster that swallows and regurgitates miniature animals.

Required:
1. What is the break-even time (BET) for Dragon Mouth?
2. How can Zelda's management use the BET to better manage the business?
3. What problems may be encountered when BET is used to monitor new product development?
4. Why is the time taken to develop new products an important consideration For Zelda Ltd? Is it an important consideration in all companies? Explain your answer.

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Year 3 $400 000 $900 000 $900 000 $700 000 Revenue Costs: Product planning and concept design Design and development Production Distribution and customer service Profit (Loss) 80 000 160 000 220 000 100 000 ($80 000) 200 000 400 000 140 000 $160 000 360 000 120 000 520 000 180 000 $200 000 $420 000 $(280 000)