Question One (25 Marks) Cold Fusion Inc

Subject:BusinessPrice: Bought3

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Question One (25 Marks) Cold Fusion Inc. has the following information available for its most recent two years of operation (figures are expressed in thousands of kwachas): INCOME STATEMENT Description 2005 2006 Gross revenue K 2.400 3.600 K 200 200 Bad debt, warranty, allowance Net revenue K ??? ??? COGS K 1.400 2,400 Contribution margin K ??? ??? % ??? ??? K 250 400 K ??? ??? Expenses Operating Income Other Income 50 0 K ??? 2?? K Net Income i. ii. Based on hard facts, what do you make of the company's performance? (15 Marks) In 2005, company was operating at 75% capacity. Rounding down to the nearest percent, what is the highest discount that the company could offer without losing money on incremental sales?