Based on the projected selling price of $20 per unit, the manufacturer invested a substantial portion of its available cash in a machine that could produce twenty-thousand gumballs in an hour. If consumers weren't willing to pay this much for gum, then the manufacturer faced significant:A) Financial risk. B) Promotion risk. C) Cost estimate risk. D) Market risk.

Question

Cheyenne Grant

Business

24 August, 23:43

Based on the projected selling price of $20 per unit, the manufacturer invested a substantial portion of its available cash in a machine that could produce twenty-thousand gumballs in an hour. If consumers weren't willing to pay this much for gum, then the manufacturer faced significant:A) Financial risk. B) Promotion risk. C) Cost estimate risk. D) Market risk.

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Answers (2)

Know the Answer?

Elisha · Answer 1

Answer:D market risk

Joel Stanley · Answer 2

The correct answer is letter "C": Cost estimate risk.

Explanation:

Cost estimate risk refers to all those factors that could affect the returns of a project because of not taking into consideration events that could affect the base costs of producing certain goods. Problems arising from the supply chain or consumer preference changes are examples of the risk of estimating costs.

Firms must consider a loss margin at the moment of setting their prices so they make sure that their expenses are offset with their profits.