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Robert shares the following information with you, as you ponder different scenarios to help your friend. After thinking about it for a while, you suggest
Robert shares the following information with you, as you ponder different scenarios to help your friend. After thinking about it for a while, you suggest the following possibilities to help him turn things around. 1. Lower the selling price by 10% to increase sales volume by 5%. 2. Advertise on the radio and with 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 $0.60 per unit), in combination with a less-expensive film to cover the top of the poster (available for $0.40 per unit). 4. Instead of paying the salespeople a fixed salary, move to a commission-based compensation plan (save $19,000 in salary; incur $1.45 per unit sold commission), which should increase sales volume by 20%. Analyze each of the proposals against the current situation to determine if it will help Robert achieve his profit goal. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round answers to 2 decimal places, e.g. 5,125.25.) After these initial discussions, Robert realizes that he has ignored any possible tax effects thus far. He estimates that his business will be subject to a 25% tax rate. Will any of the proposed scenarios allow him to reach an after-tax income goal of $9,000 ? If so, which one(s)? (Round answers to 2 decimal places, e.g. 5,125.25.)
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