(Answered) 1 estimate the effect on income of each of the options

Accounting

1. Estimate the effect on income of each of the options Flores has suggested if Wu estimates as follows:

Increasing the price to commercial customers to $1,000 per hour would reduce demand by 30%.

Reducing the price to commercial customers to $600 per hour would increase demand by 30%.

Increased promotion would increase revenue hours by up to 30%. Wu is unsure how much promotion this would take. (How much could be spent and still leave Salem Data Services with no reported loss each month if commercial hours were increased 30%?)

2. Based on your analysis above, is Salem Data Services really a problem to Salem Telephone Company? What should Flores do about Salem Data Services?

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