How much should they charge per speaker

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Question - JBL is producing a new speaker and they want to know how much to charge for it. The development costs $3.9 million for the first year and $2.4 million per year for the next 3 years to maintain their endorsement deal with Spotify. If their cost of capital is 13% and they anticipate 45,000 people buying their speaker every year, how much should they charge per speaker to breakeven on their investment for the life of their endorsement deal with Spotify?

Reference no: EM133094419

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