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The inventor of a new toy offers the Kiddy Toy Company

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Manager
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The inventor of a new toy offers the Kiddy Toy Company [#permalink] New post 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
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 [#permalink] New post 23 Nov 2005, 19:17
25000 = 2000 + 0.5X
X = 46000

(D)
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 [#permalink] New post 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
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Re: Business Alternatives [#permalink] New post 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
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The inventor of a new toy offers the Kiddy Toy Company

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