Determining the expected gross profit


In 2010, Sunny Electronics expects to sell 100,000 3-D television sets for an average price of $1,000. Expected production costs are $600 per unit. In 2011, volume is expected to increase by 10%, while inflation will increase both the sales price and the cost per unit by 3%. In real dollars, expected gross profit for 2011 is:

a. $40 million.

b. $48.2 0 million.

c. $50 million.

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Finance Basics: Determining the expected gross profit
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