Question

This test allows multiple attempts. altiple empts rce impletion This test can be saved and resumed later. Question Completion Status: > Moving to another question will save this response. Question 2 of 9 estion 2 2 points Save Answer A small manufacturing company specializes in making protective cases for smartphones. The firm is considering buying new injection molding equipment for a cost of $500,000. This will allow the manufacturer to make more phone cases in the same amount of time with an estimated increase in sales of 25%. If the manufacturer currently makes 75,000 phone cases per year, which sell for $18 per unit, what will be the incremental change in revenue next year resulting from this new equipment? a $162,500 decrease b. $125,000 increase $303,750 increase d. $337,500 increase e $837,500 increase Question 2 of 9 -> Moving to another question will save this response.

Answer 1

d. 337,500 increase

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

B Current Sale unit Sale per unit Current Revenue 75,000 $18 $1,350,000 HovanAwN- Percentage increase in Sale unit Next year sale unit Sale per unit Next year Revenue 25% 93,750 $18. $1,687,500 Incremental Change in Revenue $337,500.00 Increase

Cell reference -

ZA B 75000 Current Sale unit Sale per unit Current Revenue 18 =C2C3 0.25 =C2*(1+C7) Percentage increase in Sale unit Next year sale unit Sale per unit Next year Revenue 18 =C8*C9 Incremental Change in Revenue =C10-C4 Increase

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