What is the erosion cost from the new? bike

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Reference no: EM131535700

Erosion costs. Fat Tire Bicycle Company currently sells 35,000 bicycles per year. The current bike is a standard? balloon-tire bike selling for ?$100?, with a production and shipping cost of ?$25. The company is thinking of introducing an? off-road bike with a projected selling price of ?$375 and a production and shipping cost of ?$250. The projected annual sales for the? off-road bike are 15,000. The company will lose sales in? fat-tire bikes of 9,500 units per year if it introduces the new? bike, however. What is the erosion cost from the new? bike? Should Fat Tire start producing the? off-road bike?

Reference no: EM131535700

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