1. Management is concerned that the sales projections may be too optimistic. What happens if all of our models are too high in terms of unit sales? What if actual sales are 25% lower than our models? 2. How would an annual increase in unit sales of 15% or an annual reduction in unit sales of 15% impact our models? (Hint: This is not a one-time change. It is an increase or decrease of 15% each year.) 3. Consider an annual decrease in price per unit in the best case, worst case, and base case of 10% per unit to an increase in price per unit of 10%. (Hint: This is not a one-time change. It is an increase or decrease of 10% each year.) 4. Consider an annual decrease in the variable costs per unit in the best case, worst case, and base case of 10% per unit to an increase in variable costs per unit of 10%. (Hint: This is not a one-time change. It is an increase or decrease of 10% each year.)

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Impact of Changes on Your Financial Models 1 Lower Unit Sales 25 decrease ProfitProfits will likely decrease significantlyRevenue will be lowerwhile f... View the full answer