PLEASE HELP QUICKLY: (FIRST ANSWER GETS BRAINLIEST)

g Suppose that if GSI drops the price on the Glucoscan 3000 immediately, it can increase sales over the next year by 30% to 130,

Amanda [17]

Complete Question:

Glucose Scan Incorporated (GSI) currently sells its latest glucose monitor, the Glucoscan 3000, to diabetic patients for $129. GSI is considering lowering the sale price to $99 per unit. The cost of goods sold for each Glucoscan unit is $50, and GSI expects to sell 100,000 units over the next year. The marginal corporate tax rate is 40%. Suppose that if GSI drops the price on the Glucoscan 3000 to $99 immediately, it can increase sales over the next year by 30% to 130,000 units.

Also suppose that for each Glucoscan monitor sold, GSI expects additional sales of $100 per year on glucose testing strips and these strips have a gross profit margin of 75%. These strip sales occur on all monitor sales regardless of the price of the monitor. Including the increase in the sale of testing strips, the incremental impact of this price drop on the firms EBIT is closest to:

Answer:

$720,000

Explanation:

Incremental Earnings Before Interest and Tax Analysis

Details Current price Reduced price

Units Sold 100,000 130,000

Unit sales price 129 99

Sales Revenue $12,900,000 $12,870,000

Cost of Goods sold at $50 5,000,000 $6,500,000

Gross Profit $7,900,000 $6,370,000

G. Profit on Strips sold at $75 $7,500,000 $9,750,000

Total Gross Profit for the year $15,400,000 $16,120,000

The Net benefit of this price change is increase of Earnings before interest and tax by $720,000.

3 0

3 years ago

Scenario: Fiscal Policy Consider the economy of Arcadia. Its households spend 75% of increases in their income. There are no tax

nika2105 [10]

Answer:

less than the government spending multiplier

Explanation:

Given :

Percentage spends by a households for the increase in the income = 75%

So the mpc = 0.75

Potential output = 600 billion arcs

The government multiplier is = $\frac{1}{1-0.75}$

$=\frac{1}{0.25}$

= 4

The tax multiplier is = $\frac{c}{1-c}$

$=\frac{0.75}{0.25}$

= 3

Thus we see that the tax multiplier is less than the government spending multiplier.

7 0

3 years ago

When Argentina fixed the exchange rate of their peso to the U.S. dollar, one outcome was: Group of answer choices Argentinean ce

MariettaO [177]

Answer: Argentinean central bankers effectively gave control of their domestic interest rate to the FOMC.

Explanation:

The Federal Open Market Committee(FOMC) is a committee of the Federal Reserve which influences the interest rate in the country by engaging in Open Market Operations (OMO). In doing so, they also influence the value of the dollar which is the currency of the U.S.

By pegging the Argentine Peso to the U.S. dollar, the Argentines effectively gave control of their domestic interest rate to the FOMC because the FOMC in deciding the interest rate for the U.S. and therefore the dollar, will be deciding for any other currency that moves exactly as the dollar does which is what the Peso is now going to do.

8 0

3 years ago

Online reviews have become increasingly important to consumers’ ability to decide to purchase items ranging from household goods

Nesterboy [21]

Answer:

The above statement is TRUE

6 0

3 years ago

Who said "only by promoting manufacturing and commerce can our economy grow and prosper"?

AfilCa [17]

This was said by Alexander Hamilton in the 1790s in a debate with Thomas Jefferson during the debate of Jefferson vs. Hamilton when Hamilton proposed the National Bank yet Thomas Jefferson was strongly against it.

8 0

3 years ago