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Eco-Friendly Bikes manufactures and sells 9 different models of eco-friendly bikes. Eco-Friendly Bikes is contemplating a 6% price cut across all 9 models. It expects

Eco-Friendly Bikes manufactures and sells 9 different models of eco-friendly bikes. Eco-Friendly Bikes is contemplating a 6% price cut across all 9 models. It expects the price cut to result in a 10% increase in the number of units sold for models F601, F603, F605, and F607. The other five models (F602, F604, F606, F608, and F609) are expected to see a 7% increase in sales volume. Assess the impact of the price cut on Eco-Friendly Bikes’ profits and prepare a cash flow statement.

Model

Sales Price

Variable Costs

Sales Volume

F601

$90

$40

2,500

F602

$100

$45

3,000

F603

$110

$50

3,500

F604

$120

$55

4,000

F605

$130

$60

4,500

F606

$140

$65

2,800

F607

$150

$70

2,200

F608

$160

$75

1,800

F609

$170

$80

1,500

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