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Ignoring Income Taxes and Assuming That Cost of Goods Sold

Question 12

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Ignoring income taxes and assuming that cost of goods sold is a constant percentage of sales, calculate the maximum amount that would be economically optimal to spend on a security system if pilferage could be completely eliminated.
The Linden chain of ladies' fashion wear wishes to appraise its security system in an effort to reduce pilferage for the coming period. The following details are estimated for the current period:
Ignoring income taxes and assuming that cost of goods sold is a constant percentage of sales, calculate the maximum amount that would be economically optimal to spend on a security system if pilferage could be completely eliminated. The Linden chain of ladies' fashion wear wishes to appraise its security system in an effort to reduce pilferage for the coming period. The following details are estimated for the current period:

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Cost of pilferage $4...

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