posted by angiza on .
Winnebagel Corp. currently sells 29,400 motor homes per year at $44,100 each, and 11,760 luxury motor coaches per year at $83,300 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 20,580 of these campers per year at $11,760 each. An independent consultant has determined that if Winnebagel introduces the new campers, it should boost the sales of its existing motor homes by 4,900 units per year, and reduce the sales of its motor coaches by 1,274 units per year. The amount to use as the annual sales figure when evaluating this project is $. Recall that the annual sales figure to use for a project in project analysis is the sales that are relevant for that project, which are the incremental sales, which means that side effects from other parts of the firm are relevant, not total sales from those parts of the firm
you would calculate as follows:
Only the income that results from this project is going to be counted.
So, all "currently sells X at $" info is ignored!
20580 x $11760
+ 4900 x $44100
+ -1274 x $83300 (we sell less of these)