Essay
Pool-Glow,Inc.has developed a new light for lighting swimming pools.After doing market research,it has determined that customers would be willing to pay $140 for this light.Pool-Glow seeks to earn 25% profit on the light.At present,Pool-Glow makes an old style light for $101.25,which sells for $130.
(1. )What must the target cost be in order to earn the 25% profit that the company demands?
(2. )If Pool-Glow can adjust its costs to the target cost,the company estimates that it can sell 50,000 lights.What would Pool-Glow's profit be at this point?
(3. )How many of the old style lights would have to be sold to reach the same profit?
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(1)$140 × 0.25 = $35 = profit;Target cos...View Answer
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