3. Consider the following summary information about the financial performance of NotsoGr8 Ltd, for the fiscal years ending 31st December 2017- 31st December 2019.

The companys products currently sell for $9.99 per unit. It incurs variable costs of $4.89 per unit. In view of the recent decline in performance, Mr. Iam Nothappy, hired a consultant for advice. The consultant suggests reducing the selling price by $1 per unit. Doing so would boost demand by 15% annually, by making the product competitive in the market.

What would be the projected sales and profits for 2020-2022 if NotsoGr8 Ltd follows this suggestion? Compare your results with the current arrangement, assuming that the demand for the foreseeable future will remain at the 2019 level if NotsoGr8 Ltd does not change the selling price.

2017 2018 2019 Units sold ('000) Sales ($ '000) Costs ($ '000) Net Profit ($ '000) 1,389 $13,875 $12,792 $1,083 1,250 $12,488 $12,113 $375 1,125 $11,239 $11,501 -$263