The Digby company will sell 100 units (x1000) of capacity from their Drat product line. Each unit of capacity is worth $6 plus $4 per automation rating. The Digby company will sell the capacity for 35% off. How much do they receive when the capacity is sold?
a. $3,400,000
b. $1,870,000
c. $1,190,000
d. $2,210,000

The question is not complete, find the below complete question:

The Chester company will sell 100 units (x1000) of capacity from their Cat product line. Each unit of capacity is worth $6 plus $4 per automation rating. The Chester company will sell the capacity for 35% off. How much do they receive when the capacity is sold? Note: Automation rating is 7.0 per unit of capacity.

a) $1,870,000

b) $1,190,000

c) $2,210,000

d) $3,400,000

The correct option is C,$2,210,000

Explanation:

Th price per unit =$6+($4*automating rate) as given in the question

the price per unit=$6+($4*7)

                            =$6+$28

                            =$34

The actual worth of capacity =price per unit*number of units

number of units is 100,000

price per unit is $34

actual worth of capacity=$34*100,000

                                      =$3,400,000

Actual amount received=$3,400,000*(1-0.35)

                                       =$2,210,000.00  

The amount of received is $2,210,000

c. $1,190,000

Explanation:

100units (X 1000) capacity

Price per unit capacity = $6

Automation per rating = $4

Automation rating = 7

Value to be recieved

= ($6 +7 x $4) x 100 x 1000(0.35)

= $34 x 100000 x 0.35

= $1,190,000

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