Question
Speedway Interiors, an interior design company, has experienced a drop in business due to increased interest rates and a corresponding slowdown in remodeling projects. To
Speedway Interiors, an interior design company, has experienced a drop in business due to increased 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, Speedway 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 due to the exhibit. For the previous year, profit was as follows:
Revenue | $213,969 | ||||
Less: | |||||
Design supplies | $18,158 | ||||
Salary of Samantha Spade (owner) | 81,754 | ||||
Salary of Kim Bridesdale (full-time employee) | 55,978 | ||||
Rent | 19,046 | ||||
Utilities | 6,870 | ||||
Depreciation of office equipment | 4,340 | ||||
Printing of advertising materials | 823 | ||||
Advertising in Middleton Journal | 3,280 | ||||
Travel expenses other than the depreciation of autos | 3,180 | ||||
Depreciation of company cars | 9,040 | 202,469 | |||
Net income | $11,500 |
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 will increase or decrease? by how much?
Should the company exhibit at the home show?
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