Describe what would you do as defensive strategy

Assignment Help Financial Management

Reference no: EM131359801

White Water Rafters, Inc., (WWR) a competitor of yours, provides rafting tours on the Colorado River. WWR pays tour guides fixed salaries of $170,000 per year. You are the owner of Black Water Rafting (BWR), and you pay your tour guide salaries based on a per rafter rate of $42.50. Rafters are currently charged $50 per tour by both of the rafting companies. You both expect to provide 4,000 tours during the year. In an effort to increase their business, WWR drops its price to $40 per rafter and expects to serve 6,000 rafters, leaving your company (BWR) with the remaining 2,000 rafters. What do you do? Can you meet that price? Can you charge less than $39? (you can use qualitative and quantitative possibilities) Conceptual Connection: Using the class discussion board, describe what would you do as a defensive strategy? Why?

Reference no: EM131359801

Questions Cloud

What are operating cash flows-change in net working capital : Aguilera Acoustics, Inc., (AAI) projects unit sales for a new seven-octave voice emulation implant as follows: Year Unit Sales 1 109,000 2 128,000 3 116,000 4 99,000 5 85,000 Production of the implants will require $2,300,000 in net working capital t..

Decide to start making your own financial plan : What are the reasons that you might decide to start making your own financial plan. What are the steps that you will take, and what are the personal things that you will take into consideration? What needs will you need to identify and how do you int..

Leave funds for one year without adding to or withdrawing : You have a savings account in which you leave the funds for one year without adding to or withdrawing from the account. Which would you rather? have: a daily compounded rate of 0.035?%, a weekly compounded rate of 0.265?%, a monthly compounded rate o..

Describe what would you do as defensive strategy : White Water Rafters, Inc., (WWR) a competitor of yours, provides rafting tours on the Colorado River. WWR pays tour guides fixed salaries of $170,000 per year. You are the owner of Black Water Rafting (BWR), and you pay your tour guide salaries based..

Historical cost less accumulated depreciation : Arson Incorporated's balance sheet lists assets at historical cost less accumulated depreciation. Some of the items below involve a cash discount. For each of these. Calculate the rate of interest paid by customers who pay on the due date instead of ..

What expected cash flow forecast : Suppose the lease on a certain space will expire at the beginning of 2010. You believe that the probability of the existing tenant renewing is 75 percent. If they renew, you will need to spend only an estimated $5.00/SF to upgrade his space. What exp..

The term gross lease means : The term "Gross lease" means: An investment project has the cash flow stream of $-3250, $80, $200, $75, and $90. The cost of capital is 12%. What is the discounted payback period?

Amortization schedule with periodic payments : Amortization schedule with periodic payments. Moulton Motors is advertising the following deal on a new Honda? Civic: "Monthly payments of ?$407.09 for the next 48 months and this beauty can be? yours!" The sticker price of the car is $17,000. If you..

User Account

All Pages