Question

Bubbly Waters currently sells 540 Class A spas, 690 Class C spas, and 440 deluxe model spas each year. The firm is considering adding a mid-class spa and expects that if it does, it can sell 615 units per year. However, if the new spa is added, Class A sales are expected to decline to 345 units while the Class C sales are expected to increase to 715. The sales of the deluxe model will not be affected. Class A spas sell for an average of $16,700 each. Class C spas are priced at $8,400 and the deluxe models sell for $19,400 each. The new mid-range spa will sell for $10,400. What annual sales figure should you use in your analysis?

Multiple Choice

• $3,046,500

• $9,862,500

• $3,349,500

• $6,396,000

• $9,442,500

Answer 1

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