What would explain the change

Reference no: EM13264702

Taste Good Chocolates develops a new candy and plans to sell each bar for $1. Tast Good predicts that 1 million candy bars will be sold in the first year if the new candy bar is produced and sold, and includes $1 million of incremental revenues in its capital budgeting analysis. A senior executive in the company believes that 1 million candy bars will indeed be sold, but lowers the estimate of incremental revenue to $700,000. What would explain the change?

a. Cannibalization of 300,000 of Taste Good Chocolate's other candy bars
b. Excessive marketing costs to sell the 1 million candy bars
c. A lower discount rate
d. A higher selling price for the new candy bars

Reference no: EM13264702

Questions Cloud

Political risk arises-democratic and totalitarian government : Political risk arises from all of the following sources EXCEPT. An important distinction between democratic and totalitarian governments is the

What is the npv of accepting the system : What will be the annual net savings? Assume that the T-bill rate is 2.6 percent annually.

What is the estimated price of a share of storico stock : Storico just paid a dividend of $0.45 per share. The company has an ROE of 9% and a book value of $15 per share. The required return on investment is 12%. What is the estimated price of a share of Storico stock?

Explain what minimum sample weight should be taken : A particular method is to be used to analyze an ore that contains 4.8% copper. What minimum sample weight should be taken if the relative error due to a 0.5 mg loss is to be smaller than .1%

What would explain the change : A senior executive in the company believes that 1 million candy bars will indeed be sold, but lowers the estimate of incremental revenue to $700,000. What would explain the change?

What is the npv of accepting the lockbox agreement : What is the NPV of accepting the lockbox agreement? (Round your answer to 2 decimal places)

How many vital figures will record in the age of the earth : most scientists agree that the earth is 4.5 billion years old. 50 years from noe, how many sig figs will we record in the age of the earth

What is the effect of this raw material price increase : Suppose the price of coffee beans increases by $0.20 per pound. What is the effect of this raw material price increase on the demand for roasted coffee? If one pound produces 50 cups of coffee, would the price of a cup of coffee rise by $0.01 ? Expla..

Mathematical equations using latex : To typeset documents that include titles, sections, lists, emphasis, verbatim environments, footnotes, tables of contents, and mathematical equations using LATEX

User Account

All Pages