American Construction prepared a budget for the budget period ending 3/31/2009.
ID: 2731750 • Letter: A
Question
American Construction prepared a budget for the budget period ending 3/31/2009. The earnings required ($8,517,328) exceeded the bonding capacity ($8,000, 000). The summary of the initial budget is listed in the second and third columns of the following table, while the attainable budget is listed in fourth and fifth columns. If the company decreases price by 5%, what earnings are required to yield the Net Profit (before tax) of $256,667? (To answer this problem, please refer to the example under Decreasing Price on Page 6-5. and create a table similar to Table 6.2). If the company increases price by 5%, what earnings are required to yield the Net Profit (before tax) of $256,667? (To answer this problem, please refer to the example under Increasing Price on Page 6-7. and create a table similar to Table 6.3). If the company decrease the variable cost to earnings ratio by 1%, what earnings are required to yield the Net Profit (before tax) of $256,667? (To answer this problem, please refer to the example under Decreasing Project Costs on Page 6-10, and create a table similar to Table 6.6).Explanation / Answer
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