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problem1. Suppose your marketing people have a great plan to boost the unit sales. Unit sales rise to 500,000, however the plan requires your firm to drop the price to $29,000/unit and marketing will cost your firm $300 million total. This $300 million is on top of the firm's original $5 billion fixed costs. Your firm still has $18,000 variable cost per unit. Your initial projection for profits before marketing plan was to break even ($0 profits). What is your new projection for the profits?

problem2. After graduation, you plan to work for the Animex Corporation for 12 years and after then you start your own business. You expect to save and deposit $7,500 a year for the first six years and $15,000 annually for the following six years, with the first deposit being made a year from today. Additionally, your grandfather just gave you a $20,000 graduation gift which you will deposit immediately. If the account earns 7% compounded annually, how much will you have when you start your business 12 years from now?

Basic Finance, Finance

  • Category:- Basic Finance
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