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You have been approached by a potential client who could bring you considerable business. She says, “I’d like to find an alternative vendor for my future orders of 5,000/yr., but their pricing must be competitive.”
Your CFO has supplied you with the following information. Current product standard costs are as follows:
The board of directors has requested a thorough presentation to determine whether taking on this potential customer is a good idea. Assume that your factory is fully operational and that you will not have any learning curve impacts.
In your presentation, answer the following questions from the board using the data from the CFO:
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