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nataliaguadaluoupa25
nataliaguadaluoupa25
30.08.2021 • 
Business

Custom Motorcycles is considering whether to expand into Germany. If gas prices​ increase, the company expects more interest in​ fuel-efficient transportation such as motorcycles. As a​ result, the company is considering setting up a motorcycle assembly plant on the outskirts of Berlin. Custom Motorcycles estimates it will cost $930,000 to convert an existing building to motorcycle production. Workers will need​ training, at a total cost of $90,000. The additional costs to organize the business and to establish relationships is estimated to be $190,000. The CEO believes the company can earn profits from this expansion​ (before considering the costs in the preceding​ paragraph) of $1,776,000.

Required:
Use cost-beneft analysis to determine whether EagleRoider should expand into Germany.

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