Question
Sunglass Shack sells sunglasses for $85 each. It gave a 25% discount coupon with the purchase of sunglasses. This coupon was good for future purchases
Sunglass Shack sells sunglasses for $85 each. It gave a 25% discount coupon with the purchase of sunglasses. This coupon was good for future purchases up to 30 days after the purchase of the sunglasses. Sunglass Shack believes that 10% of customers will redeem the coupon. The coupon is not available without purchasing the sunglasses. The firm estimates that customers will purchase an additional $100 worth of merchandise when redeeming the coupon. Using the residual method, what is revenue that the firm will recognize if it sells 1,500 sunglasses?
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