A fashion label is considering inclusive sizing which would expand its offerings to plus size and petite clothing. It estimates that a move to inclusive sizing would have an initial cost of $650,000 and would require an additional annual investment $55,000 per year. If each piece of inclusively sized clothing sold generates on average $27.9 of revenue, a. What is the minimum number of pieces of inclusive sized clothing would the fashion label need to sell per year to break even in 7 years assuming their MARR is 7.9%? b. The fashion retail is also less certain about the annual costs and hires an operations manager who predicts that the annual costs is either $55,000, $25,000 or $120,000 with associated probabilities of 0.6, 0.3 and 0.1 respectively. If the selling price of clothing remains same what is the expected value of the

A fashion label is considering inclusive sizing which would expand its offerings to plus size and petite clothing. It estimates that a move to inclusive sizing would have an initial cost of $650,000 and would require an additional annual investment $55,000 per year. If each piece of inclusively sized clothing sold generates on average $27.9 of revenue, a. What is the minimum number of pieces of inclusive sized clothing would the fashion label need to sell per year to break even in 7 years assuming their MARR is 7.9%? b. The fashion retail is also less certain about the annual costs and hires an operations manager who predicts that the annual costs is either $55,000, $25,000 or $120,000 with associated probabilities of 0.6, 0.3 and 0.1 respectively. If the selling price of clothing remains same what is the expected value of the

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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