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AnnyKZ [126]
4 years ago
7

Suppose a company did $3,000,000 in annual maintenance in 2013 and expects 85% of those to renew for 2014. Suppose that product

sales for 2013 were $3,000,000 (which included free maintenance in 2013) and 60% of those were expected to pay an annual maintenance of 20% of the purchase price in 2014. What will be the annual maintenance collected in 2014?
Mathematics
1 answer:
Veseljchak [2.6K]4 years ago
8 0

Answer:

In year 2013 annual maintenance done = $ 3,000,000

Out of this 85% is expected to renew in 2014 = 0.85\times3000000 = $2,550,000

Now Sales in 2013 = $3,000,000

60% of these sales = 0.60\times3000000 = $1,800,000

Now out of this 60%, 20% annual maintenance was expected to be paid

In 2014 = 0.20\times1800000 = $360000

So, Total annual maintenance in 2014 = 2550000+360000

= $2,910,000

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