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QUESTION
ABC Corporation invested $200,000 into technology which allows them to produce widgets. They require an annual return on investment of 30% after tax...
ABC Corporation invested $200,000 into technology which allows them to produce widgets. They require an annual return on investment of 30% after tax (assume a 25% tax rate). Variable costs per widget are $300 and total fixed costs are $50,000. Assuming that ABC expects to produce and sell 2,000 widgets during the year, what should they charge customers per widget?
