Question
Delta Sonic, a chain of full service automotive detailers, is considering introducing a new 15-minute car wash and wax service at one of its locations.
Delta Sonic, a chain of full service automotive detailers, is considering introducing a new 15-minute car wash and wax service at one of its locations. The firm expects that sales from the new 15-minute service will be $175,000 per year. Delta Sonic currently offers a 1-hour wash/wax/detail service with annual sales of $90,000. While many of the 15-minute sales will be to new customers, Delta Sonic estimates that 40% of their 1-hour customers will switch and use the 15-minute service. The level of incremental sales associated with introducing the new 15-minute wash/wax service is closest to ________.
A.
$175,000
B.
$139,000
C.
$85,000
D.
$70,000
E.
$36,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started