Lorenzo, the owner of a local poster shop, comes to you for help. While his shop has been breaking even for the past two years, it has not been able to generate a profit. For him to keep the shop open, he needs to earn at least $$12,000$ in operating income next year.

You agree to help Lorenzo and ask him for some current information about his products$$ selling price and costs. You tell him you will work through some possible scenarios that might involve changing his sales price to generate the number of units sold needed to reach his target profit.

Lorenzo shares the following information with you as you ponder different scenarios to help your client.

Selling price $$7\mathrm{.}50$

Cost for paper, per unit $$0\mathrm{.}70$

Cost for printing, per unit $$1\mathrm{.}10$

Cost for film, per unit $$0\mathrm{.}60$

Staff salaries $$48,000\mathrm{.}00$

Other operating costs $$12,120\mathrm{.}00$

Using Lorenzo$$s data and proper Excel formulas, first, plan to get an understanding of Lorenzo$$s financial situation based on breakeven. Then look at the following five pricing options$/$scenarios:

$1.$ Lower the selling price by $10\%$ to increase sales volume by $5\%.$

$2.$ Advertise on radio and social media for a combined cost of $$1,000$ to increase volume by $10\%.$

$3.$ Use a more affordable paper on which to print the posters $($available for $$0\mathrm{.}60$ per unit$),$ in combination with a less$-$expensive film to coat the surface of the poster $($available for $$0\mathrm{.}40$ per unit$).$

$4.$ Instead of paying the salespeople a fixed salary, move to a commission$-$based compensation plan $($save $$20,000$ in salary; incur $$1\mathrm{.}50$ per unit sold commission$),$ which should increase sales volume by $20\%.$

$5.$ Advertise on radio and social media for a combined cost of $$1,000$ and, instead of paying salespeople a fixed salary, move to a commission$-$based compensation plan $($save $$20,000$ in salary; incur $$1\mathrm{.}50$ per unit sold commission$),$ which could increase sales volume by $25\%.$

A few days later, Lorenzo calls back and says he realizes he didn$$t take into account any tax consequences. He lets you know that he estimates his tax rate to be about $25\%$ and asks if you could please factor that into the various options. He is open to raising the price of his posters if you think that is a viable option.

He also lets you know that he$$s been approached by a potential client inquiring about a special order, and he wants you to advise him on whether to accept the order. The client wants $500$ custom posters for $$7$ per poster. The posters will require a different type of paper that will cost $$0\mathrm{.}10$ more per poster. The order will also require Lorenzo to pay an extra $$1000$ in employee costs.

Per Lorenzo$$s request, you also decide to see what effect a price increase might have on Lorenzo$$s position. You have noticed that Lorenzo$$s is one of the only poster shops in the area, and customers may be willing to pay more, and a higher price may even signal higher quality. Though, there are no guarantees that the market will accept the price increase. Lorenzo is looking at increasing the sales price to $$9\mathrm{.}25\backslash$table$[[$Options$,$After$-$Tax Profit$],[$A$,[$Insert formula$]],[$B$,[$Insert formula$]],[$C$,$ Insert formula$]],[$D$,$ Insert formula$]],[$E$,[$Insert formula$]]]$