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

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