Question
Jamie's Motor Home Sales currently sells 1,100 Class A motor homes, 2,200 Class C motor homes, and 2,800 pop-up trailers each year. Jamie is considering
Jamie's Motor Home Sales currently sells 1,100 Class A motor homes, 2,200 Class C motor homes,
and 2,800 pop-up trailers each year. Jamie is considering adding a mid-range camper and expects that
if she does so she can sell 1,500 of them. However, if the new camper is added, Jamie expects that
her Class A sales will decline to 850 units while the Class C camper sales decline to 2,000. The sales
of pop-ups will not be affected. Class A motor homes sell for an average of $140,000 each. Class C
homes are priced at $59,500 and the pop-ups sell for $5,000 each. The new mid-range camper will sell
for $42,900. What is the erosion cost of adding the mid-range camper?
A. $54,250,000
B. $46,900,000
C. $53,750,000
D. $63,150,000
E. $78,750,000
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