Johnson Scooter Company Is Considering Whether or Not to Expand

question 178

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?

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Definitions:

Genetic Tendency

A predisposition for certain traits or conditions to be passed down from parents to offspring through their genes.

Differentiation

The process by which behaviors and physical structures become more specialized.

Visual Cliff

An experimental apparatus used to study infants' perception of depth and their ability to assess risks of falling.

Infant's Posture

Infant's posture refers to the common positions and alignments that an infant's body takes, which evolve as they grow and develop motor skills.