Schalpfer Inc. is trying to determine whether to give a $15 rebate, to cut the price to $8, or to have no price change on software networking product. Currently, 40,000 unit of the product are sold each week for $45. The variable cost of the product is $6. The most likely case appears to be that a $15 rebate will increase sales 35% and about two-thirds of all people will claim the rebate. For the price cut, the most case is the sale will increase 25%
1. Given all other assumption, uses excel to create a model that describes all the scenarios given.
2. Holding all assumption constant except the rebate claim rate, at what rebate claim rate would the rebate and price cut be equally desirable
3. Is the no price change scenario a good choice? When?