Question

Lasik Look produces and sells high-end golf equipment. The company has recently been involved in developing various types of laser guns to measure distances on the golf course. The potential market for one small laser gun, the LittleLasik, appears to be very large. Because of competition, Lasik Look does not believe that it can charge more than $120 for LittleLasik. At this price, Lasik Look believes it can sell 100,000 laser guns. LittleLasik will cost $9,220,000 to manufacture, and the company wants an ROI of 15%.

Determine the target cost for one LittleLasik. (Round answer to 2 decimal places, e.g. 15.25.)

Answer 1

Solution. The following formular may be used to determina - Inuen meut s ROI percentage Reluso on $ 9220.000 x 157. __=> $1383000 R.Q.I Jovesimesel Return on Investment per unit is them $13.836 138300/100 The target cost therefore $ 106-17Compided as follows Target Cart - Market price - besived profit 106.17 * $ 120 $ 13183