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Questions 9, 10 and 11 are independent of each other 9) Looking at the original data, you are thinking of having a new advertising campaign, you would spend $40,000. How many units would you need to sell if you wish to have Net Income increase by 10%? (round to the nearest unit, 3 points) 10) Looking at the original data, you are thinking about cutting your price by 4%, how many units would you now need to sell to increase net income by 10%? (round to the nearest unit, 3 points) 11) Looking at the original data, you are thinking about buying a new machine which would increase fixed costs by $200,000 per year but reduce variable cost per unit by 5% (you would leave your selling price the original $85/unit). How many units would you need to sell if you want to increase your net income by 10%? (3 points) 12) Would you do this scenario in #11 ? (5 points) I want you to make an argument (with calculations!) for both "Yes, I would do it" and "No, I would not" and then ultimately I want you to make a decision.

Questions 9, 10 and 11 are independent of each other 9) Looking at the original data, you are thinking of having a new advertising campaign, you would spend $40,000. How many units would you need to sell if you wish to have Net Income increase by 10%? (round to the nearest unit, 3 points) 10) Looking at the original data, you are thinking about cutting your price by 4%, how many units would you now need to sell to increase net income by 10%? (round to the nearest unit, 3 points) 11) Looking at the original data, you are thinking about buying a new machine which would increase fixed costs by $200,000 per year but reduce variable cost per unit by 5% (you would leave your selling price the original $85/unit). How many units would you need to sell if you want to increase your net income by 10%? (3 points) 12) Would you do this scenario in #11 ? (5 points) I want you to make an argument (with calculations!) for both "Yes, I would do it" and "No, I would not" and then ultimately I want you to make a decision.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Questions 9, 10 and 11 are independent of each other 9) Looking at the original data, you are thinking of having a new advertising campaign, you would spend $40,000. How many units would you need to sell if you wish to have Net Income increase by 10%? (round to the nearest unit, 3 points) 10) Looking at the original data, you are thinking about cutting your price by 4%, how many units would you now need to sell to increase net income by 10%? (round to the nearest unit, 3 points) 11) Looking at the original data, you are thinking about buying a new machine which would increase fixed costs by $200,000 per year but reduce variable cost per unit by 5% (you would leave your selling price the original $85/unit). How many units would you need to sell if you want to increase your net income by 10%? (3 points) 12) Would you do this scenario in #11 ? (5 points) I want you to make an argument (with calculations!) for both "Yes, I would do it" and "No, I would not" and then ultimately I want you to make a decision.
Transcribed Image Text:Questions 9, 10 and 11 are independent of each other 9) Looking at the original data, you are thinking of having a new advertising campaign, you would spend $40,000. How many units would you need to sell if you wish to have Net Income increase by 10%? (round to the nearest unit, 3 points) 10) Looking at the original data, you are thinking about cutting your price by 4%, how many units would you now need to sell to increase net income by 10%? (round to the nearest unit, 3 points) 11) Looking at the original data, you are thinking about buying a new machine which would increase fixed costs by $200,000 per year but reduce variable cost per unit by 5% (you would leave your selling price the original $85/unit). How many units would you need to sell if you want to increase your net income by 10%? (3 points) 12) Would you do this scenario in #11 ? (5 points) I want you to make an argument (with calculations!) for both "Yes, I would do it" and "No, I would not" and then ultimately I want you to make a decision.
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