Suppose a company did $2.000.000 in annual maintenance in 2013 and expects 80% of those...

scherezade29pc

scherezade29pc

Answered

2022-07-27

Suppose a company did $2.000.000 in annual maintenance in 2013 and expects 80% of those to renew for 2014. Suppose that product sales for 2013 were $2,000,000 (which included free maintenance in 2013) and 75% of those were expected to pay an annual maintenance of 10% of the purchase price in 2014. What will be the annual maintenance collected in 2014?

Answer & Explanation

ab8s1k28q

ab8s1k28q

Expert

2022-07-28Added 17 answers

In year 2013 annual maintenance done = $ 2,000,000
Out of this 80% is expected to renew in 2014 = $ 2 , 000 , 000 0.8 = $ 1600000
Now Sales in 2013 = $2,000,000
75% of these sales = 0.75 $ 2 , 000 , 000 = $ 1500000
Now out of this 75% , 10% annual maintenance was expected to be paid
in 2014 = 0.10 $ 1500000 = $ 150000
So, Total annual maintenance in 2014 = $ 1600000 + $150000
= $1750000

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