SM.66 A small regional retailer is looking for ways to increase profits. Given its impressive record of growth, the sales andmarketing vice president wants to target a 5% increase in sales to meet the profitability goals. The company currently hasrevenues of $33,000,000 (annually), spends 64% of its revenues on purchases, and has a net profit margin of 4.75%.You are a buyer working for this company and you want to show the vice president that it may be easier to reach the profitabilitygoals by lowering purchasing expenses.If the company achieves its revenue growth target of 5%, by how many dollars would revenue increase? (Display your answer asa whole number.)NumberAssuming that revenues stayed flat (meaning the company did not try to increase sales by the 5 percent target), by whatpercentage would they have to decrease purchasing expenses to equal the increased profit that would have come from a 5percent increase to revenues? (Write your answer as a percentage, and display your answer to two decimal places.)Note: This question is to stretch your mind a bit and to show how much more, on a percentage basis, sales must increase inorder to equal the bottom-line benefits of a modest decrease in purchasing expenses. There will not be a question like this on anyassessment.The sales increase targeted percentage is(how many) times bigger than the required percentage decrease in purchasingexpenses. (Display your answer as a whole number.)Number

Revenues is $33,000,000 Purchse spend is 64 percent.

Answered: Assuming that revenues stayed flat…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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The company’s marketing manager estimates that there is a 60% chance that demand will rise faster than the current rate, a 30% chance that it will continue to rise at the current rate and a 10% chance that it will increase at a slower rate or fall. Assuming that the company’s objective is to maximize expected net present value, determine (a)The course of action which it should take (b)The expected value of perfect information.
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