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An option to repurpose the main product of Telford Engineering can now be explored. This option is to construct steel reinforcement frames for factory construction in countries vulnerable to earthquakes. This would mean that all current spare capacity could be committed to this additional product. This will increase the current sales value by $10\%$ and the materials costs will remain at $30\%$ of sales for this additional output.

Calculate the effect on net profit $($to the nearest $M$000).$ For your answer only provide the first three numbers and do not include any symbols, for example, $"543".$

TELFORD ENGINEERING P$/$L account:

"Menai $$,000$ P$/$L

$($before MEXIT$)"$ "Menai $$,000$ Actual P$/$L

$($one year after MEXIT under outsource option$)"$

Sales $8,0007,200$

$*$ Note: Exports to CETA based customers pre$-$MEXIT $=40\%$ and the volume of these fell by $30\%$ post$-$MEXIT

Costs Production costs

Materials $**-2,000-2,160$

$**$ Note: $50\%$ of imports Pre$-$MEXIT are from CETA based suppliers

Staff costs $-1,500-1,800$

Overheads $-300-300$

Distribution costs

Staff costs $-600-680$

Other costs $-160-160$

Gen Admin costs

Staff costs $-900-1,000$

Other costs $-200-200$

Accounting costs $*-800-700$

Finance costs $-100-100$

Net profit $1,440100$

Exchange rate: C$$/$M$ $1\mathrm{.}401\mathrm{.}12$

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