What is the erosion cost from the new? bike

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Fat Tire Bicycle Company currently sells 36,000 bicycles per year. The current bike is a standard? balloon-tire bike selling for ?$110?, with a production and shipping cost of ?$35. The company is thinking of introducing an? off-road bike with a projected selling price of ?$370 and a production and shipping cost of ?$275. The projected annual sales for the? off-road bike are 14,000. The company will lose sales in? fat-tire bikes of 10,000 units per year if it introduces the new? bike, however. What is the erosion cost from the new? bike? Should Fat Tire start producing the? off-road bike?

Reference no: EM131487184

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