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23 January, 18:04

The Baldwin company will sell 100 units (x1000) of capacity from their Bid product line. Each unit of capacity is worth $6 plus $4 per automation rating. The Baldwin company will sell the capacity for 35% off. How much do they receive when the capacity is sold? (Automation rating is 7.0) Select: 1

A. $1,190,000

B. $1,870,000

C. $2,210,000

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  1. 23 January, 18:57
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    correct option is C. $2,210,000

    Explanation:

    given data

    sell units = 100 units ( * 1000) = 100000 units

    capacity worth = $6 + $4 per automation rating

    sell capacity is = 35%

    Automation rating = 7.0

    to find out

    How much do they receive when the capacity is sold

    solution

    first we get here first Cost per unit that is

    Cost per unit = $6 + $4 per automation rating ... 1

    Cost per unit = $6 + $4 * 7

    Cost per unit = $34

    and capacity worth will be here as

    capacity worth = Cost per unit * sell units ... 2

    put here value we get

    capacity worth = $34 * 100000

    capacity worth = $3,400,000

    so that here Amount received will be as

    Amount received = capacity worth * (1 - sell capacity) ... 3

    put here value we get

    Amount received = $3400000 * (1 - 35%)

    so they receive when the capacity is sold = $2,210,000

    so correct option is C. $2,210,000
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