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Increased revenue in the sale would consolidate its position in the market segment. Profit Realization from DCS sales will provide extra income to invest in new products. With Increasing revenues and Profits, Investors will become interested In Speed Gizmos thus opening new financial sources to fund new projects. I would price it at $99. 95. Reason- Consider Following Profit Calulations | |Year |High |Medium |Low | |Retail price | |$124. 95 |$99. 5 |$74. 95 | |Selling Price | |$87. 47 |$69. 97 |$52. 47 | |Total Profit Before Tax |1993 |$698,006 |$699,197 |$403,364 | |Total Profit Before Tax |1994 |$921,608 |$923,036 |$568,037 | |Total Profit Before Tax |1995 |$1,189,929 |$1,191,644 |$765,644 | |Combined Profit | |$2,809,543 |$2,813,877 |$1,737,044 |
Maximum Profit in the first year and subsequent years considering same expenses and 20% increase in sales volume. Although there would be threat of Competitor’s entry but at the same time the chances of higher rate of growth are more. Adding a radio option of $5to the DCS will Change the Final Pricing of the material and to break even at the same No. and similar Profits with the new cost The Following Pricing has to be adapted. | |High |Medium |Low | |Initial Retail Price |$124. 5 |$99. 95 |$74. 95 | |Initial Selling Price |$87. 47 |$69. 97 |$52. 47 | |Brake Even No. |9392 |14073 |28056 | |New Material Cost |29. 50 |29. 50 |29. 50 | |Final selling Price |$93. 35 |$75. 85 |$58. 35 | |Final Retail Price |$133. 35 |$108. 35 |$83. 35 |