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Author Question: John Owen owns a drugstore that is experiencing significant growth. Owen is trying to decide whether ... (Read 566 times)

cnetterville

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John Owen owns a drugstore that is experiencing significant growth. Owen is trying to decide whether to expand its capacity, which currently is $200,000 in sales per quarter. Sales are seasonal. Forecasts of capacity requirements, expressed in sales per quarter for the next year, follow.

Owen is considering expanding capacity to the $250,000 level in sales per quarter. The before-tax profit margin from additional sales is 15 percent. How much would before-tax profits increase next year because of this expansion?
◦ More than $17,000
◦ More than $16,000 but less than $17,000
◦ Less than $15,000
◦ More than $15,000 but less than $16,000


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Marked as best answer by cnetterville on Apr 18, 2020

frankwu0507

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cnetterville

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Reply 2 on: Apr 18, 2020
Great answer, keep it coming :)


Bigfoot1984

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Reply 3 on: Yesterday
Excellent

 

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