A. restaurant is opening in Laie and is going to cater to the rich and the famous. It is a 35 seat                           A                                  B                                  C                                 D Cash Cost       3000                            3200                            2700                            2000 Estimate life    6                                  6                                  6                                  6 Trade in           500                              500                              600                              0 Installation       675                              675                              675                              675 Initial training   325                              350                              225                              275 Annual training  150                              125                             125                              100 Annual labor    3500                            4000                            3800                            4000 Annual maint   1200                            1500                            1100                            900   Which should you purchase based on this information. What if I gave you the following information? Machine A will produce 14,000 increase in annual sales with a 30% soda cost. Machine B will produce 16,000 increase in annual sales with 34% cost. Machine C will produce 18,000 in annual sales with 38% cost, and Machine D will produce 20,000 in annual revenue with 46% cost. Would your answer change?

Marketing
20th Edition
ISBN:9780357033791
Author:Pride, William M
Publisher:Pride, William M
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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  A. restaurant is opening in Laie and is going to cater to the rich and the famous. It is a 35 seat

                          A                                  B                                  C                                 D

Cash Cost       3000                            3200                            2700                            2000

Estimate life    6                                  6                                  6                                  6

Trade in           500                              500                              600                              0

Installation       675                              675                              675                              675

Initial training   325                              350                              225                              275

Annual training  150                              125                             125                              100

Annual labor    3500                            4000                            3800                            4000

Annual maint   1200                            1500                            1100                            900

 

Which should you purchase based on this information.

What if I gave you the following information? Machine A will produce 14,000 increase in annual sales with a 30% soda cost. Machine B will produce 16,000 increase in annual sales with 34% cost. Machine C will produce 18,000 in annual sales with 38% cost, and Machine D will produce 20,000 in annual revenue with 46% cost. Would your answer change?

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ISBN:
9780357033791
Author:
Pride, William M
Publisher:
South Western Educational Publishing