Question
Christina is aware that the new dealership in Chambersburg will have impacts on the Hagerstown location. At Hagerstown, the current annual sales is 579 cars.
Christina is aware that the new dealership in Chambersburg will have impacts on the Hagerstown location. At Hagerstown, the current annual sales is 579 cars. The selling price is $46,000 per car. The average cost is $38,000 per car. It is estimated that with the new location, the sales at Hagerstown will drop to 415 cars. The selling price will remain the same. Given more total sales, Christina can negotiate for a bigger discount from the Mercedes headquarter. The average cost will be reduced to $34,000 per car. What is the side effect of the Chambersburg location? Fixed costs at the Hagerstown location remains the same. Ignore taxes.
The side effect = $____________ [use a minus sign "-" for a negative cash flow]
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