President is correct by saying raise the price of product, Price increase results in a higher unit
contribution margin and increase in the unit price contribution causes the break-even point to
decline.
But the financial VP might reason is flawed because even though they can achieve lower
breakeven point the increase in price will not necessarily reduce the chances of loss. The reason
is customers will probably less likely to buy the product at higher price therefore the firm may be
less likely to meet the lower break-even point at an increased price over higher breakeven point
at lower price. But this works in two different ways based on the products competitors in the
market, if there are competitors who are ready to sell their product at same price the buyers
might shift but if competitors for the product are less than it is more likely that they will achive
the goal by break-even point to decline. For example, AT&T provides best internet in street and
all the homes using inter net from AT&T even if they rise price a little people still use AT&T to
avoid installation prices for new internet connection.