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within its industry. The manageduct line to include a new type of machinery that is in high demand They have gathered various financht team is faced with several decisions related to this expansion. Background information: Current product line: Luther Corp currently produces two types of industrial equipment, Product A and Product B. Proposed expansion: The business is considering introducing Product C, which requires a significant investment in research and development, production equipment, and marketing. Financi Data: The following financial information is available for the analysis: - Current sales revenue for Product A: R2,000,000 - Current sales revenue for Product B: R1,500,000 - Expected sales revenue for Product C (first year): R1,000,000 - Research and development costs for Product C: R500,000 - Production Equipment Costs for Product C: R1,200,000 - Marketing costs for Product C: R300,000 - Expected variable costs for Product A: 70% of sales revenue - Expected variable costs for Product B: 60% of sales revenue - Expected variable costs for Product C: 65% of sales revenue - Fixed costs (overheads) for the entire business: R800,000 - Investment cost for Product A=R1,000,000 - Investment cost for Product B=R900,000 - Define and describe a performance evaluation method you would use to assess the (15) performance of each product (A, B, and C) in the first year. - Calculate the expected net profit for the business in the first year if it introduces Product C. Consider all the costs and revenues for all products. (8) [50 MARKS]

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