Question
Bubbly Waters currently sells 410 Class A spas, 560 Class C spas, and 310 deluxe model spas each year. The firm is considering adding a
Bubbly Waters currently sells 410 Class A spas, 560 Class C spas, and 310 deluxe model spas each year. The firm is considering adding a mid-class spa and expects that if it does, it can sell 485 units per year. However, if the new spa is added, Class A sales are expected to decline to 280 units while the Class C sales are expected to increase to 585. The sales of the deluxe model will not be affected. Class A spas sell for an average of $14,100 each. Class C spas are priced at $7,100 and the deluxe models sell for $18,100 each. The new mid-range spa will sell for $9,100. What annual sales figure should you use in your analysis?
A) $2,758,000
B) $4,413,500
C) $6,069,000
D) $6,424,000
E) $1,655,500
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