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Cash and Go (CSG) is a grocery store. It is considering offering one-hour photo developing in their store. The firm expects that sales from the new one-hour machine will be $150,000 per year. CSG currently offers overnight film processing with annual sales of $100,000. While many of the one-hour photo sales will be to new customers, CSG estimates that 70% of their current overnight photo customers will switch and use the one-hour service.
-Estimate level of incremental sales associated with introducing the new one-hour photo service.
-Suppose that of the 70% of CSG's current overnight photo customers, half would start taking their film to a competitor that offers one-hour photo processing if CSG fails to offer the one-hour service. Estimate the level of incremental sales in this case.
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