Marketing 13th Edition by Gary Armstrong, Philip Kotler

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Abercrombie Fitch, once the favorite of loyal teens, is considering lowering prices on all items it sells in an effort to win them back after several years of sales declines. A F's total sales were $4 billion last year, but they have been declining in the face of a weak economy and an intensively competitive retail environment. Price reductions are often effective in increasing sales, but marketers need to analyze how much sales must go up before a price reduction pays off and increases revenue enough to make the it worth doing. Refer to Appendix 3: Marketing by the Numbers to answer the following questions.
By what percentage must costs decrease if A F wants to maintain the gross margin percentage of 60 percent? (AACSB: Communication; Analytical Reasoning)