VENTURE CAPITAL. Delta Venture Capital Group is considering whether to invest in Maytime Products, a new company that is planning to compete in the small kitchen appliance market. Maytime has three...

VENTURE CAPITAL. Delta Venture Capital Group is considering whether to invest in Maytime Products, a new company that is planning to compete in the small kitchen appliance market. Maytime has three products in the design and test phase: (1) a unique refrigerator/oven that can be programmed in the morning to cook foods (like chicken) but keeps the food refrigerated until the cooking

process begins; (2) a French fry maker that can make long thick French fries or small thin shoestring fries; and (3) a French toast maker that cooks French toast of any size ' evenly on the top and bottom simultaneously.

 Delta’s primary concern is how much money it must invest with Maytime before it will show a profit. The company will need an immediate initial investment of $2 ,0 0 0 ,0 0 0 to secure a plant and cover overhead costs. This investment must be paid back with initial profits. The following table gives the anticipated selling price, the variable cost per unit manufactured, and the initial demand for each product obtained through market research. Delta would have to commit to the $2,000,000 and then would like to minimize its total variable cost outlay until Maytime turns a profit (i.e., until Maytime can cover the initial $2 ,0 0 0 ,0 0 0 investment with profits (=selling price — variable cost) from its sales.)