30 MC questions - ** See ATTACHED file(s) for complete details **
31. During which of the following time periods will you probably encounter the greatest numbers of competitors?
(A) the first 6 months
(B) year 2
(C) year 3
(D) year 4
Below are the answers and explanations...
31. Because the product is new and monthly revenue projections decrease as the time passes, this is a sign that we will encounter greater number of competitors in the later stages of the product life.
Answer: (D) Year 4
32. CM= contribution margin
OI = operating income
SP = sales price per unit = $6
VC = variable cost per unit
Q = quantity
SP- VC = contribution margin per unit
CM= sales revenues - variable costs
CM = Q (SP - VC)
OI = CM- Fixed costs = 0 (breakeven condition)
Q x 2 - $3,000,000 =0
Q= 1,500,000 units
Sales revenue = Q x SP
= 1,500,000 x 6
Answer: (B) $9 million
33. The best option is to acquire company D and its patented technology because this company found a way to reduce manufacturing costs significantly. In this way we can make the market more profitable for us while still having the benefits of monopolistic power in the industry.
34. Answer: (D) Time series (since sales revenue projections decrease with the time)
35. In my opinion the best planning emphasis should be reducing costs with learning curve and efficiency methods.
36. Since the firm doesn't use any advertising methods other then yellow pages; its time to invest money in stronger advertising and promotion methods like TV and radio.
37. The best thing to do at the ...
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