Enager Inc

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Case 11-4 Enager Industries, Inc.

1. Why was McNeil’s new product proposal rejected? Should it have been? Explain.

|ROA CALCULATION FOR EACH NEW PRODUCT | | |Product A |Product B |Product C | |Unit Sales |100,000 |75,000 |60,000 | |Unit Price |18 |21 |24 | |Total Sales |$1,800,000 |$1,575,000 |$1,440,000 | | | | | | |Variable Cost per Unit |9 |9 |9 | |Variable Costs |900,000 |675,000 |540,000 | |Fixed Costs |510,000 |510,000 |510,000 | | | | | | |Net Income |$390,000 |$390,000 |$390,000 | | | | | | |Total Asset Investment |$3,000,000 |$3,000,000 |$3,000,000 | | | |...
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