Zelda Ltd manufactures toys and games. The table below shows the costs and revenues of a toy called Dragon Mouth over the first five years of its life. Dragon Mouth is a plastic monster that swallows and regurgitates miniature animals.
1. What is the break-even time (BET) for Dragon Mouth?
2. How can Zelda’s management use the BET to better manage the business?
3. What problems may be encountered when BET is used to monitor new product development?
4. Why is the time taken to develop new products an important consideration For Zelda Ltd? Is it an important consideration in all companies? Explain your answer.