Franco Electronics Currently Sells a Camera for $240

Multiple Choice

Franco Electronics currently sells a camera for $240. An aggressive competitor has announced plans for a similar product that will be sold for $205. Franco's marketing department believes that if the price is dropped to meet competition, unit sales will increase by 10%. The current cost to manufacture and distribute the camera is $175, and Franco has a profit goal of 20% of sales. If Franco meets competitive selling prices, what is the company's target cost?

A) $41.
B) $48.
C) $164.
D) $175.
E) $192.