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Technology Stocks : Dell Technologies Inc.
DELL 133.35+0.1%Nov 28 9:30 AM EST
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To: Jim Patterson who wrote (38894)4/24/1998 5:18:00 PM
From: Chuzzlewit  Read Replies (2) of 176387
 
Jim, this is a fairly simple question to answer. The key is to look at revenues per segment. I am assuming that ASP is tied to costs, and thus gross margins are constant. So, in order for the gross profit to remain the same we would have the following relationship:

n = 1/(1-r)

where n = the decimalized increase in units sold
where r = the decimalized reduction in ASP

So, for example, a 10% reduction in ASP would require an 11.1% increase in units sold.

TTFN,
CTC
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