In 2017, Rouse & Sons, a small environmental-testing firm, performed 12,400 radon tests for $250 each and 15,400 lead tests for $190 each. Because newer homes are being built with lead-free pipes, lead testing volume is expected to decrease by 12% next year. However, awareness of radon-related health hazards is expected to result in a 4% increase in radon-test volume each year in the near future. Jim Rouse feels that if he lowers his price for lead testing to $180 per test, he will have to face only a 5% decline in lead-test sales in 2018.

1. Prepare a 2018 sales budget for Rouse & Sons assuming that Rouse holds prices at 2017 levels.

2. Prepare a 2018 sales budget for Rouse & Sons assuming that Rouse lowers the price of lead test to $180. Should Rouse lower the price of a lead test in 2018 if the company's goal is to maximize sales revenue?

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