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# The inventor of a new toy offers the Kiddy Toy Company

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Manager
Joined: 04 Sep 2005
Posts: 142
Location: Fringes of the Boreal, Canada
Followers: 1

Kudos [?]: 3 [0], given: 0

The inventor of a new toy offers the Kiddy Toy Company [#permalink]  23 Nov 2005, 15:05
The inventor of a new toy offers the Kiddy Toy Company exclusive rights to manufacture and sell the toy for a lump sum payment of $25,000. After estimating the future sales possibilities beyond one year are nonexistent, the Company management is reviewing an alternative proposal to give a lump sum payment of$2000 plus royalty of $0.50 for each unit sold. How many units must be sold the first year to make this alternative as economically attractive to the investor as the original request? A) 25,000 B) 50,000 C) 36,000 D) 46,000 E) 20,000 _________________ "To hell with circumstances; I create opportunities." - Bruce Lee Director Joined: 14 Sep 2005 Posts: 994 Location: South Korea Followers: 2 Kudos [?]: 42 [0], given: 0 [#permalink] 23 Nov 2005, 19:17 25000 = 2000 + 0.5X X = 46000 (D) _________________ Auge um Auge, Zahn um Zahn ! Senior Manager Joined: 11 May 2004 Posts: 458 Location: New York Followers: 1 Kudos [?]: 14 [0], given: 0 [#permalink] 23 Nov 2005, 21:31 Should be 46,000 x=number of toys to be sold 25,000 = 2000 +.5x 25,000-2,000 = .5x 23,000/.5 = x 46,000 =x Senior Manager Joined: 14 Apr 2005 Posts: 419 Location: India, Chennai Followers: 1 Kudos [?]: 6 [0], given: 0 Re: Business Alternatives [#permalink] 24 Nov 2005, 04:13 To break-even we need 25000 = 2000 +.5(x) Solving for x we get 460000 Re: Business Alternatives [#permalink] 24 Nov 2005, 04:13 Similar topics Replies Last post Similar Topics: 2 A toy company's engineering department developed a new model 4 09 Dec 2013, 10:44 3 Toys4Them, an online toy merchant, generated$220 million in 12 16 Jan 2013, 14:21
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