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Question - Superior Products, Inc. is interested in producing and selling a deluxe electric razor. Market research indicates that customers would be willing to pay $80 for such a razor and that 40,000 units could be sold each year at this price. The current cost to produce the razor is estimated to be $68.
If Superior Products requires a 20% return on sales to undertake production, what is the target cost for the new razor?
a) $16
b) $64
c) $54.40
d) $68
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