Floating Homes, Inc. is a manufacturer of luxury pontoon and house boats that sell for $40,000 to $100,000. To estimate its revenues for the following year, Floating Homes divides its boat sales into three categories based on selling price (high, medium, and low) and estimates the number of units it expects to sell under three different economic scenarios. These scenarios include a recession (Scenario I), a continuation of current conditions in which the economy is level (Scenario II), and a strong economy (Scenario III). These estimates are as follows:

Using these estimates, calculate the expected revenue for Floating Homes, Inc. for the followingyear.

Transcribed Image Text:

Scenario l Scenario II Scenario IIl Recession) (Level Economy) (Strong Economy) Probability High-Priced Boats Category Unit sales Average price per unit Medium-Priced Boats Category Unit sales Average price per unit Low-Priced Boats Category Unit sales Average price per unit 25% 50% 25% 50 S90,000 400 $90,000 1,000 $90,000 100 $70,000 800 $70,000 3,000 70,000 200 1,500 S50,000 5,000 $50,000 S50,000