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Turkey Hill Motor Homes Currently Sells 1,200 Class a Motor

Question 44

Multiple Choice

Turkey Hill Motor Homes currently sells 1,200 Class A motor homes,2,600 Class C motor homes,and 4,000 pop-up trailers each year.It is considering adding a mid-range camper and expects that if it does so the firm can sell 1,500 of them.However,if the new camper is added,the firm expects its Class A sales to decline by 10 percent while the Class C camper sales decline to 2,100 units.The sales of pop-ups will not be affected.Class A motor homes sell for an average of $162,000 each.Class C homes are priced at $59,500 and the pop-ups sell for $5,500 each.The new mid-range camper will sell for $32,900.What is the erosion cost?


A) $36,250,000
B) $49,190,000
C) $49,350,000
D) $160,000
E) $118,000

Correct Answer:

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