Chesrown Motors Is Considering Whether or Not to Expand into a New

Essay

Chesrown Motors is considering whether or not to expand into a new area of the US.They produce high-end motorcycles with moderate gas mileage,but have developed a new technology to increase the mileage of their bikes.They will need to spend $175,000 to retrofit a building to incorporate the new fuel technology.New worker training will cost $84,000.Other expenses involved in getting the new plant up and running amount to $32,000.Cagle anticipates that,with gas price increases,the profit potential of this expansion is $388,000.Do the benefits outweigh the costs or do the costs outweigh the benefits,and by how much?