Company is considering introducing a new compact disc player model at a price of $ 105 per unit. santos 's controller has compiled the following incremental cost information based on an estimate of 120 comma 000 units of sales annually for the new product: direct materials cost $3,600,000 direct labor cost $2,400,000 variable manufacturing overhead $1,200,000 sales commission 10% of sales fixed cost $2,000,000 the sales manager expects the introduction of the new model to result in a reduction in sales of the existing model from 300 comma 000 to 240 comma 000 units. the contribution margin for the existing model is $ 20 per unit. requirements (a) determine the total impact on santos 's profit from the introduction of the new model. (b) should santos introduce the new model? explain.

For example, the upper right cell shows that if expresso advertises and beantown doesn't advertise, expresso will make a profit of $15 million, and beantown will make a profit of $2 million. assume this is a simultaneous game and that expresso and beantown are both profit-maximizing firms. if expresso decides to advertise, it will earn a profit of $ million if beantown advertises and a profit of $ million if beantown does not advertise. if expresso decides not to advertise, it will earn a profit of $ million if beantown advertises and a profit of $ million if beantown does not advertise. if beantown advertises, expresso makes a higher profit if it chooses . if beantown doesn't advertise, expresso makes a higher profit if it chooses . suppose that both firms start off not advertising. if the firms act independently, what strategies will they end up choosing? expresso will choose to advertise and beantown will choose not to advertise. expresso will choose not to advertise and beantown will choose to advertise. both firms will choose to advertise. both firms will choose not to advertise.