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However, if the company introduces wild berry, it will cut into the
sales of the original flavors based on the following estimates:
Percentage of Sales Erosion
Here are the revenue and cost per unit of ice cream for Ice Cream
City:
Vanilla: current revenue of $3.05 per unit and cost of $1.22 per unit
French vanilla: current revenue of $3.15 per unit and cost of $1.38
per unit
Strawberry: current revenue of $3.25 per unit and cost of $1.41 per
unit
Chocolate: current revenue of $3.25 per unit and cost of $1.57 per
unit
Mint chocolate: current revenue of $3.25 per unit and cost of $1.63
per unit
Wild berry: projected revenue of $3.25 per unit and cost of $1.44
per unit
Find the annual erosion of revenue, the cost savings, and the net
cash flow with the new ice cream.
Ch 11 Advanced problem 1