Demand in year 3 and beyond is expected to exceed $850,000 per quarter. Burdell is considering expansion at the end of the fourth quarter of this year (year 1). How much would before-tax profits in year 2 increase because of this expansion?
A. less than $28,000
B. more than $28,000 but less than $32,000
C. more than $32,000 but less than $36,000
D. more than $36,000
Answer:D
Demand in year 3 and beyond is expected to exceed $850,000 per quarter. Burdell is considering expansion at the end of the fourth quarter of this year (year 1). How much would before-tax profits in year 2 increase because of this expansion?
A. less than $28,000 B. more than $28,000 but less than $32,000 C. more than $32,000 but less than $36,000 D. more than $36,000