A grocery store makes pricing decisions based on product cost. All other costs to operate the store are fixed at \($800,000\) per year. The average cost of inventory at the store is \($1million.\) The inventory turns over eight times per year.

a. If prices are set at 12 percent above cost, what is the profit of the grocery store for the year?

b. What is the profit of the grocery store if turnover increases to 10 times per year and prices remain at 12 percent above costs?

c. What price mark-up is necessary for the company to have a \($300,000\) profit if inventory turnover is eight times per year?