The design engineer's preliminary estimate of a product's design, production, and distribution costs is $1,550 per unit. Market research shows potential customers are willing to pay up to $1,989 for the product. If the desired profit is 40 percent of target cost, should the company make the product?
A) No, the market price only allows for a 28% profit at this cost.
B) Yes, with only slight modifications to cost.
C) Yes, the desired costs and profit are right on target.
D) Yes, the market price will allow for a profit that exceeds the target.
A
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