Reference no: EM133079320

Question - The Lonely Island has decided to move on from the music business. They want to start selling an energy drink to make you run faster and jump higher, and it will come in a heavy duty bottle in case someone throws it on the ground. They initially invest $3,800,000 into initial product R&D and will need to pay $45,000 per year for product quality and maintenance which they expect to go up by 6% per year due to pending inflation. Andy Samberg's genius business plan is to sell this drink for 8 years and aims to see returns of 18%. If each bottle has a gross margin of $1.31, approximately how many bottles do they need to sell every year to breakeven?

A. 226,667

B. 454,336

C. 688,321

D. 751,831