QUESTION 12 In November 2013, a car dealer is trying to determine how many cars to order from the manufacturer for 2014. A car ordered in 2013 cost $10000. The dealer expects that each car ordered from the manufacturer will cost 4% to 8% more in 2014. The selling price for each car in 2013 was $15000 but the dealer expects he will have to give a discount because of heavy competition, and that the selling price in 2014 will be between 93% and 98% of the 2013 price. The dealer expects to sell between 700 and 900 cars. Refer to the Car Dealership Problem and start with the original values. If the dealer decides to offer a discount of 5% on 2013 selling price, which of the following options will return the highest profit? O a. sell 900 cars, with 8% cost increase b. sell 850 cars, with 7% cost increase O. sell 800 cars, with 6% cost increase O d. sell 750 cars, with 5% cost increase O e. sell 700 cars , with 4% cost increase

QUESTION 12 In November 2013, a car dealer is trying to determine how many cars to order from the manufacturer for 2014. A car ordered in 2013 cost $10000. The dealer expects that each car ordered from the manufacturer will cost 4% to 8% more in 2014. The selling price for each car in 2013 was $15000 but the dealer expects he will have to give a discount because of heavy competition, and that the selling price in 2014 will be between 93% and 98% of the 2013 price. The dealer expects to sell between 700 and 900 cars. Refer to the Car Dealership Problem and start with the original values. If the dealer decides to offer a discount of 5% on 2013 selling price, which of the following options will return the highest profit? O a. sell 900 cars, with 8% cost increase b. sell 850 cars, with 7% cost increase O. sell 800 cars, with 6% cost increase O d. sell 750 cars, with 5% cost increase O e. sell 700 cars , with 4% cost increase

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter15: Managing Short-term Assets

Section: Chapter Questions

Problem 14PROB

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