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3. Compute the projected profit for the order quantities suggested by the management team under three scenarios: worst case in which sales equal 10,000 units, most likely case in which sales equal 20,000 units, and best case in which sales equal 30,000 units.
A profitable company should be shooting for a minimum 10% net. You said you had $50,000 left over which is about a 4% net profit. You need to figure out what the profit margin should be to achieve that 10% net profit. Your partner is right but at least you are in the green. I know for my heating and air conditioning company I work for, we need a 40% profit margin to achieve double digit net profits.