Answer the Following Question(s)using the Information Below

question 109

Multiple Choice

Answer the following question(s) using the information below.Frank's Computer Monitors Inc..currently sells 17" monitors for $270.It has costs of $210.A competitor is bringing a new 17" monitor to market that will sell for $225.Management believes it must lower the price to $225 to compete in the market for 17" monitors.Marketing believes that the new price will cause sales to increase by 10%, even with a new competitor in the market.Frank's sales are currently 10,000 monitors per year.
-What is the change in operating income if marketing is correct and only the sales price is changed?

• A)$1,421,250
• B)$(204,000)
• C)$(352,500)
• D)$(435,000)
• E)$18,750

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