Please read the following scenario carefully for the next question: If, (a) the Retail Selling Price of the WX350 is $89 in 1997, (b) the retailer’s markup is 50% (of retailer’s SP), (c) CIMA sells directly to these retailers, (d) CIMA’s markup is 15% (of manufacturer’s SP), (e) CIMA’s selling prices increase by 4% every year (increases take effect in 1998), (f) CIMA’s cost prices increase every year by 3% (increases take effect in 1998), (g) CIMA expects to sell 525 units in 1997, 672 units in 1998, 747 units in 1999, 865 units in 2000 and 981 units in 2001, (h) the cost of capital for CIMA is 15%, (i) CIMA’s investment in the WX350 was $ 18,000 and (j) year 0 (zero), for PV discounting purposes was 1996. What will CIMA’s profit be in 1999? a. $ 52,514.15 b. $ 28,173.66 c. $ 9,689.38 d. $ 5,968.53 e. $ 4,912.32
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Please read the following scenario carefully for the next question:
If, (a) the Retail Selling Price of the WX350 is $89 in 1997,
(b) the retailer’s markup is 50% (of retailer’s SP),
(c) CIMA sells directly to these retailers,
(d) CIMA’s markup is 15% (of manufacturer’s SP),
(e) CIMA’s selling prices increase by 4% every year (increases take effect in 1998),
(f) CIMA’s cost prices increase every year by 3% (increases take effect in 1998),
(g) CIMA expects to sell 525 units in 1997, 672 units in 1998, 747 units in 1999, 865 units in 2000 and 981 units in 2001,
(h) the cost of capital for CIMA is 15%,
(i) CIMA’s investment in the WX350 was $ 18,000 and
(j) year 0 (zero), for PV discounting purposes was 1996.
What will CIMA’s profit be in 1999?
a. $ 52,514.15
b. $ 28,173.66
c. $ 9,689.38
d. $ 5,968.53
e. $ 4,912.32
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