Question
Aspen Recreation Company sells three products today. The first product is called the Apache Classic Dunebuggy and they sell 390 units each year. The second
Aspen Recreation Company sells three products today. The first product is called the Apache Classic Dunebuggy and they sell 390 units each year. The second product is called the Apache Basic Dunebuggy and they sell 540 units each year. The third product is called the Apache Deluxe Dunebuggy and they sell 290 units per year. Aspen Recreation is thinking about launching a fourth product called the Apache Gen Z Dunebuggy. If they launch this Gen Z Dunebuggy, they expect to be able to sell 465 units annually. But, if they launch the Gen Z Dunebuggy, there will be impacts on their current products. The Apache Classic Dunebuggy will have a sales decline to 270 units each year. The Apache Basic Dunebuggy will have an expected sales increase to 565 per year. There will be no change in the sales of the Apache Deluxe Dunebuggy. The selling price for the Apache Classic Dunebuggy is $13,700 each. The selling price for the Apache Basic Dunebuggy is $6,900 each. The selling price for the Apache Deluxe Dunebuggy is $17,900 each. The proposed new Apache Gen Z Dunebuggy is expected to sell for $8,900 each. For purposes of analyzing the costs and benefits of potentially launching this new product, the Apache Gen Z Dunebuggy, what is the appropriate annual amount of sales you should use in your analysis?
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