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The company that you manage has invested $5 million in developing a new product, but the development is not quite finished. At a recent meeting, your salespeople report that the introduction of competing
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43 votes
The company that you manage has invested $5 million in developing a new product, but the development is not quite finished. At a recent meeting, your salespeople report that the introduction of competing products has reduced the expected sales of your new product to $3 million. If it would cost $1 million to finish development and make the product, youshould go ahead and do so. The most you should pay to complete development is $2.0 million.

User Jasonnoahchoi
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24 votes
24 votes

Answer:

Yes; $2.0 million

Step-by-step explanation:

Yes, SHOULD YOU GO AHEAD and do so reason been that the TOTAL LOSS would then be the amount of $3 million instead of the amount of $5 million which therefore means that The MOST YOU SHOULD PAY in order to complete the development would be the amount of $2 million calculated as ($5 Million-$3 Million).

User AboulEinein
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