Question
Bubbly Waters currently sells 490 Class A spas, 640 Class C spas, and 390 deluxe model spas each year. The firm is considering adding a
Bubbly Waters currently sells 490 Class A spas, 640 Class C spas, and 390 deluxe model spas each year. The firm is considering adding a mid-class spa and expects that if it does, it can sell 565 units per year. However, if the new spa is added, Class A sales are expected to decline to 320 units while the Class C sales are expected to increase to 665. The sales of the deluxe model will not be affected. Class A spas sell for an average of $15,700 each. Class C spas are priced at $7,900 and the deluxe models sell for $18,900 each. The new mid-range spa will sell for $9,900. What annual sales figure should you use in your analysis?
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$2,471,500
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$5,593,500
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$8,460,000
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$3,122,000
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$8,065,000
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