You are upgrading to better production equipment for your firm's only product. The new equipment will allow you to make more of

Question

3 years ago

10

You are upgrading to better production equipment for your firm's only product. The new equipment will allow you to make more of

your product in the same amount of time. Thus, you forecast that total sales will increase next year by 16 % over the current amount of 102 comma 000 units. If your sales price is $ 19 per unit, what are the incremental revenues next year from the upgrade?

Business

1 answer:

Ray Of Light [21] · Answer 1 · 2022-09-07T12:14:32+03:00

Answer:

$310,080

Explanation:

Incremental revenue refers to the additional revenue generated by a certain project or activity. In this case, your sales should increase by 16% from 102,000 units to 118,320 units. Total revenue will increase from $1,938,000 (= 102,000 x $19) to $2,248,080 (= 118,320 x $19).

The incremental revenue = $2,248,080 - $1,938,000 = $310,080

You are upgrading to better production equipment for your​ firm's only product. The new equipment will allow you to make more of

You are upgrading to better production equipment for your firm's only product. The new equipment will allow you to make more of