Reference no: EM132588406

Infinity Designs, an interior design company, has experienced a drop in business due to an increase in interest rates and a corresponding slowdown in remodeling projects. To stimulate business, the company is considering exhibiting at the Home and Garden Expo. The exhibit will cost the company $12,000 for space. At the show, Infinity Designs will present a slide show on a PC, pass out brochures that are printed previously, (the company printed more than needed), and show its portfolio of previous jobs.

The company estimates that revenue will increase by $36,000 over the next year as a result of the exhibit. For the previous year, profit was as follows:

Revenue $201,000

Less:

Design supplies (variable cost) $15,500

Salary of Samantha Spade (owner) 80,000

Salary of Kim Bridesdale (full time employee) 55,000

Rent 18,000

Utilities 6,000

Depreciation of office equipment 3,600

Printing of advertising materials 700

Advertising in Middleton Journal2,500

Travel expenses other than depreciation of autos (variable cost) $2,400

Depreciation of company cars 9,000

Required:

Question 1: Calculate the impact of the exhibit on company profit. Round to two decimal places.