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Problem 3: After a few years of successful business, Thomas saw the need to diversify his business to take advantage of the growth potential of new markets. Doing so also reduces the business risk. He set up a new company that sells 3 models of tables: Russian style, Italian style, and Mexican style His targeted market was in NYC where there is huge demand for those products. Operating results for October re below Russian ItalianMexican stv stv stv Units sold 4,000 4.500 3.500 1,2000 S36,000 $22,500 S35,000 S$93,500 Variable departmental costs Avoidable fixed costs Unavoidable fixed costs Net income 13,500 17,500 45,000 5,000 15,000 7.000 24.000 S 8,000 4.000) 5.500 9500 14,000 6,000 8,000 4,000 9,000 a.If Italian style is discontinued, management estimates that sales of Russian style will increase by 20%. In good form, prepare an incremental analysis to determine if Italian style should be discontinued. b. What qualitative factors should Thomas consider Should Italian style be discontinued based solely Without creating new income statements, and relating question a. c. on quantitative aspects? Briefly justify your response using your results from your analysis in part A determine the amount of the company's new net income if Italian style is discontinued. Show your calculations

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