Shimada Products Corporation of Japan is anxious to enter the electronic calcula

Question

Shimada Products Corporation of Japan is anxious to enter the electronic calculator market. Management believes that in order to be competitive in world markets, the price of the electronic calculator that the company is developing cannot exceed $15. Shimada's required rate of return is 12% on all investments. An investment of $12,160,000 would be required to purchase the equipment needed to produce the 384,000 calculators that management believes can be sold each year at the $15 price Required Compute the target cost of one calculator. (Round your answer to 2 decimal places arget cost per unit

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Investment         12,160,000.00 Required rate of return 12.00% Desired Income = 12160,000*12%           1,459,200.00 No of units               384,000.00 Profit per unit                            3.80 Selling price per unit                         15.00 Target cost per unit = 15 - 3.80                         11.20

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