Find loss incurred on all weather tire that exceeds value

Reference no: EM13128187

Assume that ACME tires sells t heir high performance tires for $220 each and their all weather tires for $140 each. Further assume that the cost of producing a high performance tire is $180 and the cost of producing an all wather tire is $125. Finally, assume tht if a tire does not last 40,000 miles, ACME tires will replace it free of charge to the consumer; ACME will incur the cost of replacement, but will not receive any additional revenue. What is the profit earned/loss incurred on an all weather tire that exceeds 40,000 miles?

Reference no: EM13128187

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