Explore BrainMass

Explore BrainMass

    Relevant amount of sales for cash flows

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    9-2. Relevant Cash Flows. Winnebagel Corp. currently sells 19,000 motor homes per
    year at $50,000 each, and 6,000 luxury motor coaches per year at $90,000 each. The
    company wants to introduce a new portable camper to fill out its product line; it
    hopes to sell 12,000 of these campers per year at $15,000 each. An independent
    consultant has determined that if Winnebagel introduces the new campers, it should
    boost the sales of its existing motor homes by 2,000 units per year, and reduce the
    sales of its motor coaches by 1,000 units per year. What is the amount to use as the
    annual sales figure when evaluating this project? Why?

    © BrainMass Inc. brainmass.com March 4, 2021, 6:18 pm ad1c9bdddf

    Solution Preview

    Present Situation is 19000 motor homes at 50,000 and 6000 luxury at 90,000.
    With the introduction of camper, the sales would be 12,000 at 15,000 + ...

    Solution Summary

    The solution explains how to calculate the relevant sales figure which would be used in incremental cash flows