Question

An import car dealer sels three modeis of a car. The reakii prices and the curremt dealer invoice prices (cosis) for the basic models and options indicated are given in the followng two maticns (inhere "Ar" means air-conditioning). We defne the marhup matrix to be M−N (mackup is the dillerence between the retar peice and the dealor invoice price). Suppose that the value of the dollar has had a sharp decine and the dealer involce price is to have an across the-board 15% increase next year. To stay competitive with domeste cars, the dealer increases the retal prices 10%. Calcuiate a markup matrix for next year's modes and the optons indicated. Calculate a markup matrax for next year's modets, Select the correct choice below and, if necessary, fil in the answor box(es) to complete your choice. A B. The markup matrix tor next year's model does not exist.

Answer 1

To calculate the markup matrix for next year's models, we apply a 15% increase to the dealer invoice prices and a 10% increase to the retail prices. This calculation is done for each combination of model and option.

Step-by-step explanation:

Markup Matrix Calculation

To calculate the markup matrix for next year's models, we need to first determine the current dealer invoice prices and the retail prices for the basic models and options for the cars. We then apply the changes mentioned in the question, which are a 15% increase in dealer invoice prices and a 10% increase in retail prices.

For example, let's say the current dealer invoice price for a basic model is $10,000 and the retail price is $15,000. Applying the 15% increase to the dealer invoice price gives us $11,500, and applying the 10% increase to the retail price gives us $16,500.

We repeat this calculation for each combination of model and option to find the markup matrix for next year's models.