Homework answers / question archive / Alpha company has provided the following data:    Sales 12,000 units  Sales price $100 per unit  Variable cost $60 per unit  Fixed cost $300,000   Management believes that if the selling price were decreased by $10 per unit and an additional $20,000 were spent on advertising that the sales would increase by 45%

Alpha company has provided the following data:    Sales 12,000 units  Sales price $100 per unit  Variable cost $60 per unit  Fixed cost $300,000   Management believes that if the selling price were decreased by $10 per unit and an additional $20,000 were spent on advertising that the sales would increase by 45%

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Alpha company has provided the following data:

 Sales

12,000 units

 Sales price

$100 per unit

 Variable cost

$60 per unit

 Fixed cost

$300,000

Management believes that if the selling price were decreased by $10 per unit and an additional $20,000 were spent on advertising that the sales would increase by 45%. What would the change in net income be? Should Alpha go forward with the reduced selling price and new advertising campaign?