Question
Electronic Component Company (ECC) is a producer of high-end video and music equipment. ECC currently sells its top of the line ECC video player for
Electronic Component Company (ECC) is a producer of high-end video and music equipment. ECC currently sells its top of the line "ECC" video player for a price of $360. It costs ECC $265 to make the player. ECC's main competitor is coming to market with a new video player that will sell for a price of $330. ECC feels that it must reduce its price to $330 in order to compete. The sales and marketing department of ECC believes the reduced price will cause sales to increase by 20%. ECC currently sells 211,000 video players per year.
Irrespective of the competitor's price, what is EEC's required selling price if the target profit is 26% of sales and current costs cannot be reduced?
Question 1 options:
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$377.11.
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$386.61.
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$370.61.
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$265.00.
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$358.11.
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