Problem

Target Sales Price; Return on Investment (ROI) Schwenn Products, a bicycle manufactu...

Target Sales Price; Return on Investment (ROI) Schwenn Products, a bicycle manufacturer, uses normal volume as the basis for setting prices. That is, it sets prices on the basis of long-term volume predictions and then adjusts these prices only for large changes in pay rates or materials prices. You are given the following information:

Required

1. What sales price is needed to attain the 25% target ROI?

2. What ROI rate will be earned at sales volumes of 2,000 and 1,000 units, respectively, using the sales price you determined in requirement 1?

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Solutions For Problems in Chapter 19

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