The Baldwin company will sell 100 units (x1000) of capacity from their Best 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?

Amount received = $2,210,000

Explanation:

given data

sell = 100 units (x 1000)

capacity automation rating = $6 + $4

sell capacity = 35%

solution

we consider that Automation rating = 7.0

so now we get here Cost per unit is

Cost per unit = capacity * Automation rating ... 1

put here value and we get

Cost per unit = 6 + 4 * 7

Cost per unit = 34

and

now we get capacity worth that is

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

put here value

capacity worth = 34 * 100000

capacity worth = 3,400,000

so

we get now Amount received that is

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

put here value

Amount received = 3400000 * (1 - 35%)

Amount received = $2,210,000