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Chinnab Chinnab
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6 years ago
John Owen owns a drugstore that is experiencing significant growth. Owen is trying to decide whether to expand its capacity, which currently is 200,000 in sales per quarter. Sales are seasonal.
 
  Forecasts of capacity requirements, expressed in sales per quarter for the next year, follow.
 
  Quarter (000 )
  1 240
  2 180
  3 220
  4 260
 
  Owen is considering expanding capacity to the 250,000 level in sales per quarter. The before-tax profit margin from additional sales is 15 percent. How much would before-tax profits increase next year because of this expansion?
  A) less than 15,000
  B) more than 15,000 but less than 16,000
  C) more than 16,000 but less than 17,000
  D) more than 17,000
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monmon
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