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Q: Accounting ( No Answer,   0 Comments )
Subject: Accounting
Category: Business and Money > Accounting
Asked by: sleeplessinflorida-ga
List Price: $30.00
Posted: 17 Jun 2006 18:20 PDT
Expires: 17 Jul 2006 18:20 PDT
Question ID: 739029
Charlie?s Furniture Store is described by owners as an ?high price,
high service? opertation. Margin has a high of 32% per yer., but
turnover is on a low 0.4 based on total assets of $800,000. Charlie
wishes to lower prices to compete with a new discount furniture store
about to open.

A.	Calculate current sales and ROI.
B.	If new strategy would reduce margin to 20%, and total assets stay
the same, calculate sales that would be required to have same ROI as
they currently earned.
C.	Given results of a-b, and Charlie is upset, what financial
reasoning to use to calm him.
D.	Charlie is not convinced of lowering prices is a good practice and
considers increasing marketing effort by starting a new advertising
campaign offer extensive market research to identify target customer
groups. Explain impact of a successful strategy of this nature on
Margin, Turnover and ROI.
E.	Alternative strategy to maintain competitiveness. Explain strategy
and describe the likely impact of this strategy on Margin, Turnover,
and ROI.
There is no answer at this time.

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