Winnebagel Corp. currently sells 20,000 motor homes per year at $58,000 each, an

Question

Winnebagel Corp. currently sells 20,000 motor homes per year at $58,000 each, and 7,000 luxury motor coaches per year at $95,000 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 15,000 of these campers per year at $9,000 each. An independent consultant has determined that if Winnebagel introduces the new campers, it should boost the sales of its existing motor homes by 2,300 units per year, and reduce the sales of its motor coaches by 1,000 units per year. What is the amount to use as the annual sales figure when evaluating this project? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.)

Explanation / Answer

Sales revenue from new portable camper = 15000*$9000 = $    13,50,00,000 Additional sales of motor homes = 2300*$58000 = $    13,34,00,000 Decrease in sales of motor coaches = 1000*$95000 = $     -9,50,00,000 Annual sales figure for evaluating the project $    17,34,00,000

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