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Alex17521 [72]
3 years ago
12

A small manufacturer that makes clothespins and other household products buys new injection molding equipment for a cost of $500

,000. This will allow the manufacturer to make more clothespins in the same amount of time with an estimated increase in sales of 25%. If the manufacturer currently makes 75 tons of clothespins per year, which sell at $18,000 per ton, what will be the increase in revenue next year from the new equipment?
A) $837,500
B) $303,750
C) $125,000
D) $337,500
Business
1 answer:
kherson [118]3 years ago
8 0

Answer:

The correct answer is D.

Explanation:

Giving the following information:

New injection molding equipment for a cost of $500,000.

Increase in sales of 25%.

The manufacturer currently makes 75 tons of clothespins per year, which sell at $18,000 per ton.

First, we need to calculate the new sales level:

New sales (units)= 75t* 1.25= 93.75 tons

Increase in sales (dollars)= (93.75 - 75)*18,000= $337,500

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