Payback method and discounted payback method

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Reference no: EM132006137

1. Mike's Bikes is thinking about carrying a new line of adult tricycles. To carry this new line, Mike's Bikes would have to invest $20,249 in training and equipment. The new bikes would earn Mike's Bikes a 31% contribution margin as percent of selling price. Mike's Bikes will not take on the new line unless the company is assured of earning a 10% return on sales. Calculate breakeven sales in DOLLARS, while achieving the ROS% target. (Rounding: penny.)

2. What is the difference between the following methods: - payback method - discounted payback method - NPV - Valuation Model for a domestic corporation and a MNC.

Reference no: EM132006137

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