Question
XYZ currently sells 30,000 regular cars per year at $80,000 each and 10,500 luxury cars per year at $125,000 each. The company wants to introduce
XYZ currently sells 30,000 regular cars per year at $80,000 each and 10,500 luxury cars per year at $125,000 each. The company wants to introduce a new truck to fill out its product line; it hopes to sell 10,000 of these trucks per year at $50,000 each. An independent consultant has determined that if the company introduces the new trucks, it could boost the sales of its existing regular cars by 4,000 units per year and reduce the sales of its luxury cars by 1,000 units per year.
a. What are the annual sales for the new trucks?
b. What are the annual increased sales for the regular cars?
c. What is annual loss in sales for the luxury cars?
d. What is the amount to use as the annual sales figure when evaluating this project?
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