As the strategic manager of cutrite scissors, you are tasked with producing a strategy forintroducing a new line of premium scissors. your competitor produces a line of similar scissors at a cost of $1 and sells them for $12. because your company has inferior production capabilities, your scissors will cost $3 each to produce. however, your handle is proven to be more comfortable than your competitors'. assuming you are guaranteed to sell the same number of units as your competitor, which of the following strategies is most likely to achieve a competitive advantage?
a. reduce the quality of materials used in cutrite scissors to bring unit costs down to $1, then sell the scissors for $12.
b. continue to produce cutrite scissors for $3 but set the price at $10.
c. offer a buy-one-get-one-free sale on cutrite scissors.
d. market cutrite scissors as a higher-quality alternative and sell them for $15.

The gilbert instrument corporation is considering replacing the wood steamer it currently uses to shape guitar sides. the steamer has 6 years of remaining life. if kept,the steamer will have depreciaiton expenses of $650 for five years and $325 for the sixthyear. its current book value is $3,575, and it can be sold on an internet auction site for$4,150 at this time. if the old steamer is not replaced, it can be sold for $800 at the endof its useful life. gilbert is considering purchasing the side steamer 3000, a higher-end steamer, whichcosts $12,000 and has an estimated useful life of 6 years with an estimated salvage value of$1,500. this steamer falls into the macrs 5-year class, so the applicable depreciationrates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. the new steamer is fasterand allows for an output expansion, so sales would rise by $2,000 per year; the newmachine's much greater efficiency would reduce operating expenses by $1,900 per year.to support the greater sales, the new machine would require that inventories increase by$2,900, but accounts payable would simultaneously increase by $700. gilbert's marginalfederal-plus-state tax rate is 40%, and its wacc is 15%.a. should it replace the old steamer? b. npv of replace = $2,083.51