BUSI 2160U Chapter Notes - Chapter 3: Olestra, Discounting, Kilogram
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Note: sales commission costs and advertising costs are irrelevant because they are marketing in nature. Similarly, customer hotline service costs are irrelevant because they are customer service in nature (see first bulleted point in case). = ,000 of relevant (incremental) revenues from the special sale. Cost per batch number of batches required by special sales offer. = (batch costs/number of batches) x (special sales units/number of units per batch) = (,000 cost per batch) (2 batches required by special sales offer) = ,000 batch cost for special sales offer. Plant inspection team cost if special sale is accepted. Relevant total costs = ,000 relevant variable costs + ,000 relevant fixed costs. = ,000 relevant costs from special sales offer. Annual net cash inflow from special sales relevant profit discount factor. = ,000 3. 79079 (discount factor from table 12a-2 for an annuity of uniform cash flows that corresponds to a rate of 10 percent and a.
