Musk LFlexor Owns a Hot Tub Store That Is Experiencing Significant

Multiple Choice

Musk L.Flexor owns a hot tub store that is experiencing significant growth.Flexor is trying to decide whether to expand its capacity,which currently is at $750,000 in sales per quarter.He is thinking about expanding to the $850,000 level.The before-tax profit from additional sales is 20 percent.Sales are seasonal,with peaks in the spring and summer quarters.Forecasts of capacity requirements,expressed in sales per quarter,for next year (year 2) are:
$$\begin{array} { | c | c | } \hline \text { Quarter } & ( \$ 000 ) \\\hline 1 & 720 \\2 & 800 \\3 & 890 \\4 & 690 \\\hline\end{array}$$
Demand in year 3 and beyond is expected to exceed $850,000 per quarter.Flexor is considering expansion at the end of the fourth quarter of this year (year 1) .How much would before-tax profits in year 2 increase because of this expansion?

A) less than $28,000
B) more than $28,000 but less than $32,000
C) more than $32,000 but less than $36,000
D) more than $36,000