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What should be the overall effect on the company

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Reference no: EM132203238

Nesmith Corporation sells a single product at a selling price of $220 per unit and its variable expenses are $88 per unit. The company currently sells 4,000 units per month and its fixed expenses are $425,000 per month. The marketing manager would like to cut the selling price by $11 and increase the advertising budget by $23,700 per month. The marketing manager predicts that these two changes would increase monthly sales by 400 units. What should be the overall effect on the company's monthly net operating income of this change?

Reference no: EM132203238

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