Reference no: EM132971620

Your work has been noticed by other company's and you are building a reputation as a superstar finance professional. You decide to start your own consulting company.

• Your first client is a start-up food company. This new company has developed a hazel nut - granola combination product that had tested extremely well with focus groups. Young adults between the ages of 18-29 rated it the best cereal they had ever tasted. The company has forecasted to sell a whopping 49,800 boxes of this new product in 2021. Other information provided to you were; that the company has fixed costs of $280,000, depreciation expense of $120,000, a tax rate of 30% and interest expense of $21,300.

• You find out from the production team that each cereal box will cost $15.89 to produce. The new general manager is insisting that operating cashflows must be no less than $141,305 for this new product launch in 2021.

Problem 1: You have been asked to determine what the minimum price should be for this product, given the general managers operating cashflow requirements?