[FONT="]FoodFor Less (FFL), a grocery store, is considering offering one hour photodeveloping in their store. The firmexpects that sales from the new one hour machine will be $150,000 peryear. FFL currently offers overnightfilm processing with annual sales of $100,000. While many of the one hour photo sales will be to new customers, FFLestimates that 60% of their current overnight photo customers will switch anduse the one hour service.
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[FONT="]Supposethat of the 60% of FFL's current overnight photo customers, half would starttaking their film to a competitor that offers one hour photo processing if FFLfails to offer the one hour service. Thelevel of incremental sales in this case is closest to:[/FONT]
[FONT="]A) $60,000[/FONT]
[FONT="]B) $150,000[/FONT]
[FONT="]C) $90,000[/FONT]
[FONT="][/FONT]
[FONT="]D) $120,000
Please provide your answer/explanation and calculations. Thank you.[/FONT]
[/FONT]
[FONT="]Supposethat of the 60% of FFL's current overnight photo customers, half would starttaking their film to a competitor that offers one hour photo processing if FFLfails to offer the one hour service. Thelevel of incremental sales in this case is closest to:[/FONT]
[FONT="]A) $60,000[/FONT]
[FONT="]B) $150,000[/FONT]
[FONT="]C) $90,000[/FONT]
[FONT="][/FONT]
[FONT="]D) $120,000
Please provide your answer/explanation and calculations. Thank you.[/FONT]