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Johnson Scooter Company Is Considering Whether or Not to Expand

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Essay

Johnson Scooter Company is considering whether or not to expand into a new area of the United States. They produce high-performance gas scooters with moderate gas mileage, but have developed a new battery technology that combines a small amount of electrical energy with the existing gas power. This new technology will significantly increase the fuel economy of their bikes. They will need to spend $5,075,000 to retrofit a building to incorporate the new fuel-saving technology. New worker training will cost $1,984,000. Other expenses involved to set up and run the new plant are $332,000. The CEO anticipates that, with gas price increases, the profit potential of this expansion is $7,588,000. Do the benefits outweigh the costs, or do the costs outweigh the benefits, and by how much?


Definitions:

Fraud

A deceitful practice or act intended to gain unfair or unlawful advantage.

CPT Codes

Current Procedural Terminology codes, a set of medical codes used to report diagnostic, medical, and surgical procedures for billing and documentation.

Evaluation And Management Codes

Codes used in medical billing to represent patient visits and assessments, dictating the level of care provided.

Compliance Plan

A process for finding, correcting, and preventing illegal medical office practices.

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