Question

A small business that makes household products buys new injection molding equipment for a cost of $500,000. This will allow the manufacturer to make more clothespins in the same amount of time with an estimated increase in sales of 20%. If the manufacturer currently makes 75 tons of clothespins per year, which sell at $18,000 per ton, what will be the increase in revenue next year from the new equipment

Answer 1

$270,000

Step-by-step explanation:

Estimated increase in sales of 20%

Clothespins per year 75 tons

Sales of Clothespins 18,000 per ton

Hence

0.20 × 75 × 18,000 = $270,000

Therefore what will be the increase in revenue next year from the new equipment will be $270,000