A few years ago, Nuts, Bolts and Brackets, Inc purchased a small warehouse. The firm paid $2,200,000 for a warehouse and $300,000 for construct costs.

An expansion is needed.

This expansion will cost him about $400,000. Using the additional space wisely, Dan estimates that he will be able to generate about $70,000 more in sales per year, while incurring $41,500 in labor and variable costs of goods.