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FIN 419 Week 4 Team Assignment Problem Set (New)

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Ch 10 Advanced Problem 2
Chapter 13 Problem 18
Chapter 12 Problem 17
Ch 11 Advanced problem 1
ADVANCED PROBLEMS FOR SPREADSHEET APPLICATION
These problems are available in MyFinanceLab.
1.
Erosion costs. Ice Cream City plans to introduce a new flavor,
wild berry, to its current set of five flavors, which include
vanilla, French vanilla, strawberry, chocolate, and mint
chocolate. The new sales of wild berry are projected as follows:
The expected sales will come from both new customers and
current customers who switch flavors. The current projected
sales for the existing flavors (assuming no introduction of the
new flavor) are
Projected Sales
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