Sesame Company wants to earn a before-tax profit of $2,750,000. How many clocks must the company…

1. Sesame Company wants to earn a before-tax profit of $2,750,000. How many clocks must the company sell to achieve that profit?

2. Sesame Company estimates that spending an additional $425,000 on advertising will result in an additional 50,000 clocks being sold. Should the company incur this extra fixed cost?

3. Sesame Company estimates that reducing a clock’s selling price to $37.50 will result in an additional 90,000 clocks per year being sold. Should the company reduce the clock’s selling price?