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Tom's Tacos is considering a promotional discount on taco meals for two weeks, reducing the price from $8.00 to $6.50. Marketing expenses are $1800. Tom
Tom's Tacos is considering a promotional discount on taco meals for two weeks, reducing the price from $8.00 to $6.50. Marketing expenses are $1800. Tom expects taco meal sales to increase by 30%, while burrito sales may decline by 15%. Weekly data are:
- Taco Meals: Sales Price: $8.00, Variable Costs: $4.00, Sales Volume: 600
- Burritos: Sales Price: $7.00, Variable Costs: $3.50, Sales Volume: 700
Requirement: Determine the financial impact and advise if Tom should proceed.
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