Projecting gross profit the effects of volume versus price

Reference no: EM13363781

Projecting gross profit: the effects of volume versus price. Suppose you are analyzing a firm that is successfully executing strategy that differentiates its products from those of its competitors.

Because of this strategy you project that next year the firms will generate 6.0% revenue growth from price increase and 3.0% revenue growth from sales volume increases. Assume that the firm production cost structure involves strictly variable cost.

Should you project that the firm gross profit will increase next year? If you project that the gross profit will increase is the increase a result of volume growth price growth or both? Should you project that the firm's gross profit margin will increase next years? If you project that the gross profit margin will increase is the increase a result of volume growth price growth or both?

Reference no: EM13363781

Questions Cloud

Xiao li wishes to accumulate 50000 by the end of 10 years : xiao li wishes to accumulate 50000 by the end of 10 years by making equal annual end-of-year deposits over the next 10

Two years ago the krusty krab restaurant purchased a grill : two years ago the krusty krab restaurant purchased a grill for 50000. the owner eugene krabs has learned that a new

1 why did the proportion of equities in long-term funds : 1. why did the proportion of equities in long-term funds increase from 38.3 percentnbsp in 1990 to over 70 percent by

Store driven forecast the home depot is a leading specialty : store driven forecast. the home depot is a leading specialty retailer of hardware and home improvement products and is

Projecting gross profit the effects of volume versus price : projecting gross profit the effects of volume versus price. suppose you are analyzing a firm that is successfully

Consider the statement strategy analysis seems to be an : consider the statement strategy analysis seems to be an unnecessary detour in doing financial statement analysis. why

The president of gentiva health services is considering : the president of gentiva health services is considering increasing her number of medicare patients served next year.

Ted jones the surgery unit director is about to choose his : ted jones the surgery unit director is about to choose his strategy for creating a capital expenditure funding proposal

Future value with multiple cash flows konerko inc expects : future value with multiple cash flows konerko inc. expects to earn cash flows of 13227 15611 18970 and 19114 over the

User Account

All Pages