Suppose that Dove is introducing a new soap (Dove Natural) and expects the following: a cannibalization rate of 10% on units. The revenues of Dove soap are $10,000,000. Dove Natural

Suppose that Dove is introducing a new soap (Dove Natural) and expects the following: a cannibalization rate of 10% on units. The revenues of Dove soap are $10,000,000. Dove Natural expects $5,000,000 in new ad buys and an increase of $2,000,000 in Selling, General and Administrative Costs. Assume that Dove sells their soap at a price of $2 per bar and the cost is $0.50 per bar. Suppose that Dove sells Dove Natural at a price of $4 per bar and the cost is $1.50 per bar. How many bars of soap would Dove Natural have to sell to break even? ( show your work) Suppose that Dove Natural expects to sell 2,000,000 bars of soap per year. How many years would it take Dove Natural to break even? ( show your work)

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