a the goal of the firm Wendy Winter needs to determine whether the current warehouse system should be upgraded to a new system. The new system would require an inibial cash outlay of $250.000. The current system could be sold e new system over the next five years is $325,000, while the monetary benefit of the current system over the same period is $125,000. Furthermore, it is expected that the firm's stock price will increase if the new system is implemented because it will make the firm more cost efficient and cost effective in the long Marginal cost-benefit analysi 55,000. The monetary benefit run. a. Identify and describe the analysis Wendy should use to make the decision. b. Calculate the marginal benefit of the proposed new warehouse system. Calculate the d. What should Wendy's recommendation to the firm be regarding the new warehouse system? Explain your recommendation. e. If the new system is implemented, will the firm achieve the primary financial goal of managers? marginal cost of the proposed m d new warehouse system. a. Identify and describe the analysis Wendy should use to make the decision. OA. Supply-and-demand analysis-Economic principle used as a guideline for efficient business operation that deals with the study of how buyers and sellers interact to determine transaction prices and quantities. OB. Marginal cost-benefit analysis- Economic principle used as a guideline for efficient business operation that deals with the study of how buyers and sellers interact to determine transaction prices and quantities. OC. Supply-and-demand analysis-Economic principle that states that financial decisions should be made and actions taken only when the supply exceeds the demand. OD. Marginal cost-benefit analysis-Economic principle that states that financial decisions should be made and actions taken only when the added benefits exceed the added costs.
a the goal of the firm Wendy Winter needs to determine whether the current warehouse system should be upgraded to a new system. The new system would require an inibial cash outlay of $250.000. The current system could be sold e new system over the next five years is $325,000, while the monetary benefit of the current system over the same period is $125,000. Furthermore, it is expected that the firm's stock price will increase if the new system is implemented because it will make the firm more cost efficient and cost effective in the long Marginal cost-benefit analysi 55,000. The monetary benefit run. a. Identify and describe the analysis Wendy should use to make the decision. b. Calculate the marginal benefit of the proposed new warehouse system. Calculate the d. What should Wendy's recommendation to the firm be regarding the new warehouse system? Explain your recommendation. e. If the new system is implemented, will the firm achieve the primary financial goal of managers? marginal cost of the proposed m d new warehouse system. a. Identify and describe the analysis Wendy should use to make the decision. OA. Supply-and-demand analysis-Economic principle used as a guideline for efficient business operation that deals with the study of how buyers and sellers interact to determine transaction prices and quantities. OB. Marginal cost-benefit analysis- Economic principle used as a guideline for efficient business operation that deals with the study of how buyers and sellers interact to determine transaction prices and quantities. OC. Supply-and-demand analysis-Economic principle that states that financial decisions should be made and actions taken only when the supply exceeds the demand. OD. Marginal cost-benefit analysis-Economic principle that states that financial decisions should be made and actions taken only when the added benefits exceed the added costs.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Question 9, P1-4 (book/static)
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Marginal cost-benefit analysis and the goal of the firm Wendy Winter needs to determine whether the current warehouse system should be upgraded to a new system. The new system would require an initial cash outlay of $250,000. The current system could be sold for $55,000. The monetary benefit of the
new system over the next five years is $325,000, while the monetary benefit of the current system over the same period is $125,000. Furthermore, it is expected that the firm's stock price will increase if the new system is implemented because it will make the firm more cost efficient and cost effective in the long
run.
a. Identify and describe the analysis Wendy should use to make the decision.
b. Calculate the marginal benefit of the proposed new warehouse system.
c. Calculate the marginal cost of the proposed new warehouse system.
d. What should Wendy's recommendation to the firm be regarding the new warehouse system? Explain your recommendation.
e. If the new system is implemented, will the firm achieve the primary financial goal of managers?
a. Identify and describe the analysis Wendy should use to make the decision.
O A. Supply-and-demand analysis-Economic principle used as a guideline for efficient business operation that deals with the study of how buyers and sellers interact to determine transaction prices and quantities.
O B. Marginal cost-benefit analysis-Economic principle used as a guideline for efficient business operation that deals with the study of how buyers and sellers interact to determine transaction prices and quantities.
OC. Supply-and-demand analysis-Economic principle that states that financial decisions should be made and actions taken only when the supply exceeds the demand.
O D. Marginal cost-benefit analysis-Economic principle that states that financial decisions should be made and actions taken only when the added benefits exceed the added costs.
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