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Zippy Company Has a Product That It Currently Sells in the Market

question 114

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Zippy Company has a product that it currently sells in the market for $50 per unit. Zippy has developed a new feature that, if added to the existing product, will allow Zippy to receive a price of $65 per unit. The total cost of adding this new feature is $26,000 and Zippy expects to sell 1,600 units in the coming year. What is the net effect on next-year's operating income of adding the feature to the product?

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