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Chao Products currently sells small boats for $ 3 6 0 . It has costs currently assigned to it of $ 2 8 0 .

Chao Products currently sells small boats for $360. It has costs currently assigned to it of $280. A competitor is
bringing a new small boat to market that will sell for $320. Management believes it must lower the price to $320
to compete in the market for small boats. Marketing believes that the new price will cause sales to increase by
10 percent, even with a new competitor in the market. Chao's sales are currently 100,000 per year.
What is Chao's target selling price if costs cannot be reduced and the target profit is changed to cost plus
20 percent? Round to the nearest cent.
A. $336.00
B. $353.33
C. $280.00
D. $350.00
E. $360.00
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