Background: You are a financial analyst at a large retail company. The company is considering launching a new product line, but there is uncertainty about how sales volume will be affected by changes in price. Your task is to perform a sensitivity analysis to determine the impact of price changes on the company's financial results.

Instructions:

$1.$Use the following information to create a projected income statement for the new product line:

Revenue @$10$ pu: $$500,000$

Variable costs: $$250,000$

Fixed costs: $$200,000$

Net Income: $$50,000$

$2.$Assume that the company is considering two pricing strategies for the new product line:

Price A: $$10$

Price B: $$12$

$3.$Use the contribution margin formula to calculate the contribution margin ratio for each pricing strategy:

Contribution Margin Ratio $=$ Contribution Margin $/$ Revenue

Contribution Margin $=$ Revenue $-$ Variable Costs

$4.$Perform a sensitivity analysis to determine the expected impact of each pricing strategy on the company's financial results:

Scenario $1$: Increase in sales volume by $10\%$

Scenario $2$: Decrease in sales volume by $10\%$

$5.$Prepare a report summarizing your findings and recommendations for the company.