Question
Cato Interiors, an interior design company, has experienced a drop in business due to an increase in interest rates and a corresponding slowdown in remodeling
Cato Interiors, an interior design company, has experienced a drop in business due to an increase in interest rates and a corresponding slowdown in remodeling projects. To stimulate business, the company is considering exhibiting at the Middleton Home and Garden Expo. The exhibit will cost the company $15,140 for space. At the show, Cato Interiors will present a slide show on a laptop, pass out brochures that were printed previously (the company printed more than needed), and show its portfolio of previous jobs. The company estimates that revenue will increase by $39,850 over the next year as a result of the exhibit. For the previous year, profit was as follows: Revenue $212,499 Less: Design supplies $17,941 Salary of Samantha Spade (owner) 81,247 Salary of Kim Bridesdale (full-time employee) 56,005 Rent 19,133 Utilities 6,780 Depreciation of office equipment 3,690 Printing of advertising materials 773 Advertising in Middleton Journal 2,830 Travel expenses other than depreciation of autos 2,990 Depreciation of company cars 10,140 201,529 Net income $10,970 Assume that design supplies and travel other than depreciation are variable costs. Calculate the impact of the exhibit on company profit. (Round intermediate calculations to 4 decimal places, e.g. 0.3215 and final answer to 0 decimal places, e.g. 125.)
Company profit (increase/decreas)e by $______.Should the company exhibit at the home show? The company (should/should not) exhibit at the home show.
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