Eckert Company is involved in producing and selling high-end golf equipment. The

Question

Eckert Company is involved in producing and selling high-end golf equipment. The company has recently been involved in developing various types of laser guns to measure yardages on the golf course. One small laser gun, called LittleLaser, appears to have a very large potential market. Because o competition Eckert does not believe that can charge more than 99 for e as e price, Eckert believes it can sell 116,000 of these laser guns. Eckert will require an investment of $10,378,947 to manufacture, and the company wants an ROI of 19%. is Determine the target cost for one Littlelaser. (Round answer to O decimal places, e.g. 10.) Target cost ï..usaza: s

Explanation / Answer

investment x ROI Percentage =Return on Investment 10378947 x19% =$1972000

1972000/116000=16.99 or $17 per unit

market price - desired profit = target cost

$99 - $17 = $82

so target cost is 82.

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