Define the pricing objectives, determine the costs, choose a price, evaluate demand, analyze the competitive price environment.

match each of the options above to the items below.

1. you decide that red wolf hardware needs to increase the volume of hammers sold.
2. you review marketing research that shows consumers are not price-sensitive when buying hammers.
3. you develop a break-even analysis based on the costs to sell the hammers.
4. you check online to see what the other hardware stores in town are charging for hammers.
5. you utilize reference prices to determine that red wolf customers should pay $11 for a standard hammer.

On january 1, 2018, wetick optometrists leased diagnostic equipment from southern corp. which had purchased the equipment at a cost of $2,256,342. the lease agreement specifies six annual payments of $490,000 beginning january 1, 2018, the beginning of the lease, and at each december 31 thereafter through 2022. the six-year lease term ending december 31, 2023 (a year after the final payment), is equal to the estimated useful life of the equipment. the contract specifies that lease payments for each year will increase on the basis of the increase in the consumer price index for the year just ended. thus, the first payment will be $490,000, and the second and subsequent payments might be different. the cpi at the beginning of the lease is 120. southern routinely acquires diagnostic equipment for lease to other firms. the interest rate in these financing arrangements is 12%. (fv of $1, pv of $1, fva of $1, pva of $1, fvad of $1 and pvad of $1) prepare the appropriate journal entries for wetick and southern to record the lease at its beginning.