Question

Sipacore Interiors, an interior design company, has experienced a drop in business due to an increase in interest rates and a corresponding slowdown in remodeling projects. To stimulate business, the company is considering exhibiting at the Middleton Home and Garden Expo. The exhibit will cost the company $14,940 for space. At the show, Sipacore Interiors will present a slide show on a laptop, pass out brochures that were printed previously (the company printed more than needed), and show its portfolio of previous jobs.

The company estimates that revenue will increase by $40,060 over the next year as a result of the exhibit. For the previous year, profit was as follows:

Revenue					$214,610
Less:
	Design supplies		$18,037
	Salary of Samantha Spade (owner)		82,418
	Salary of Kim Bridesdale (full-time employee)		55,617
	Rent		19,046
	Utilities		6,820
	Depreciation of office equipment		3,690
	Printing of advertising materials		822
	Advertising in Middleton Journal		2,730
	Travel expenses other than depreciation of autos		3,150
	Depreciation of company cars		9,610		201,940
Net income					$12,670

Calculate the impact of the exhibit on company profit. (Round intermediate calculations to 4 decimal places, e.g. 0.3215 and final answer to 0 decimal places, e.g. 125.)

Company profit will

decrease,increase

by .

Should the company exhibit at the home show?

The company

should not,should

exhibit at the home show.

Answer 1