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Pharmaceuticals makes a number of generic versions of drugs. It produces the generic version of Xyzal (anti-histamine), a branded drug which patent expired. MethRUS invested $100,000 to obtain FDA approval (not refundable, one-time fee) and $50,000 to certify one of its production lines for its production (one-time fee, not-refundable). Production of the drug will cost $1,000,000 in total fixed cost. In addition, per unit cost (MC) of the pill is $0.10.
Q: If forecasted sales are 10 million tablets, what is the breakeven price? Show your work
Q: If the generic Xyzal sells for $0.25 per pill, should MethRUS give up or discontinue selling this product? Explain. Hint: compare this price to the breakeven price.
Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..
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