June'15 . Question 1. yilandwe.

This topic has 3 replies, 2 voices, and was last updated 9 years ago by John Moffat.

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March 8, 2017 at 3:18 am #376435
rida
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i couldn’t understand from where comes contribution earned by imoni co. 120$ .
when it is written in question it is 40$ per component .
March 8, 2017 at 3:52 am #376440
rida
Member
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plus i have another problem in calculating redundancy and lost contribution .
i couldn’t understand from where it comes .1$ million. kindly please explain . thanks
March 8, 2017 at 6:51 am #376485
John Moffat
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The current contribution is $40, which means that the cost to Imoni is 200 – 40 = 160.
They are going to increase the price charged to 280 and so in future they will get a contribution of 280 – 160 = 120.
March 8, 2017 at 6:53 am #376486
John Moffat
Keymaster
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The $0.1M is the present value of the redundancy and lost contribution figures that are given in the question.
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