Baldwin Bicycle Case Study

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Baldwin Bicycle Case Study

1. The relevant costs are those that occur in the future and differ for each feasible alternative. These relevant costs should be compared to the current situation at Baldwin in order to evaluate the decision to join with Hi-Valu:

Per units cost $83.90
R&D Cost (5000/25000) 0.2
Other variable costs** 18.44
Total $102.54

** 5.5% of assets
Added estimate of monthly inventory cost to balance sheet info to estimate avg assets 2 months materials
(25000 bikes/12 mo x 2 mo inv) x 38.90 $165,847

WIP inv (1000 x 83.90) 83900

Finished Goods (500 x 83.90) 41950
Inc to assets 291697
Current assets 8092000
Assets est 8383697
x.055 461103
divided by 25000 bikes 18.44

2. Cost of capital = 18% 102.54
cost per bike times 25000 bikes 25000
divide by 25000 bikes $18.46

3. Product cannibalization refers ot the phenomenon whereby a new product......

As a boy he attended the Hopkins Grammar School in New Haven, Connecticut. Ties of loyalty and interest bound him to this school for the rest of his life. Active in all its alumni work, he was, more specifically, for many years president of its board of trustees; in 1910, on the occasion of the two hundred and fiftieth anniversary of the founding of the school, he delivered a discourse on its history; when shortly before his death it became necessary to house the school in new quarters, he was one of the largest, if not the largest, of the individual donors whose contributions made possible a set of modern buildings for what he was fond of referring to as the fourth oldest institution of learning in the United States.

From the Hopkins Grammar School he went to Yale College, from which he was graduated with the class of 1861. There is scant information as to his four years at college. During that period he kept a diary from which he read extracts on the fifty-fifth reunion of his class, but this diary is not at present available. That the...
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