BBM Corporation's Managers Are Attempting to Build a New Product

Multiple Choice

BBM Corporation's managers are attempting to build a new product, a better mousetrap. They began by determining the features customers wanted and what they would pay for those features. BBM's engineers then reverse-engineered a competitor's product to understand its design and related production processes. Their analysis indicated that customers would pay $10.00 for a better mousetrap.
If BBM's required profit margin is 25%, the target cost of a better mousetrap is:

A) $2.50
B) $7.50
C) $12.50
D) None of the above