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Currently, GH Co. sells 42,600 handbags annually at an average price of $149 each. It is...

Currently, GH Co. sells 42,600 handbags annually at an average price of $149 each. It is considering adding a lower-priced line of handbags that sell for $79 each. The firm estimates it can sell 21,000 of the lower-priced handbags but expects to sell 7,200 less of the higher-priced handbags by doing so. What is the amount of annual sales that should be used when evaluating the addition of the lower priced handbags?

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Answer #1

amount of annual sales = 21,000 * 79 - 7200 * 149

amount of annual sales = 586,200

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