Question

LaRuie, Inc., is a specialty retailer of souvenir wear. Currently, they offer T-shirts, sweatshirts, and caps. Their most recent annual sales consisted of $12,000 of T-shirts, $18,000 of sweatshirts, and $4,500 of caps. The company is adding polo shirts to the line-up and projects that next years sales will consist of $11,000 of T-shirts, $16,000 of sweatshirts, $7,500 of polo shirts, and $5,000 of caps. What amount of next year's revenue is from side effects of the additional product?

-$5,000

-$2,500

$0

$2,500

$5,000

Answer 1

Solution :

There is an increase in revenue of $ 5,000 in Year 2 as a result of side effect of the additional product.

Thus the solution is Option 5 = $ 5,000

Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.