Tang Enterprises is thinking of introducing a new beverage. You are aware of the
ID: 2722328 • Letter: T
Question
Tang Enterprises is thinking of introducing a new beverage. You are aware of the following information. Which of the following pieces of information are NOT relevant to determining whether or not to take the project?
a. Last years sales were $650,000.
b. The cost of ingredients is expected to be $35,000 per year.
c. Tang Enterprises forecasts that they will be able to sell 80,000 bottles at $1.50 per bottle.
d. Sales of the beverage are expected to reduce sales of Tang Enterprises orange beverage by $15,000.
e. Investing in the new beverage will require a new loan which carries an interest payment of $10,000 per year.
Explanation / Answer
d. Sales of the beverage are expected to reduce sales of Tang Enterprises orange beverage by $15,000.