Sawit Corporation, a Manufacturer of Woodworking Tools, Wants to Introduce

Multiple Choice

Sawit Corporation, a manufacturer of woodworking tools, wants to introduce a new power screwdriver. To compete effectively, the screwdriver cannot be priced at more than $14. The company requires a 15% rate of return on investment on all new products. In order to produce and sell 80,000 screwdrivers each year, the company will need to make an investment of $800,000. The target cost per screwdriver would be:

A) $15.50
B) $1.50
C) $14.00
D) $12.50