6. incremental analysis: if production does increase dramatically
6. incremental analysis: if production does increase dramatically
after their presentation on shark tank, the lees will need more space for production. they have two options. option 1 is to rent out a spacious warehouse nearby. if they pursue this option, there rent will be $1200 per month and utilities are estimated to cost an additional $350 per month. their second option, option 2, is to rent a smaller storefront space that is also nearby. the storefront rent is $1350 per month. however, utilities will likely only cost an additional $150 per month. they want to compare their options over one year’s time (since each rental contract is a 1 year commitment). what is the incremental analysis if the lees choose option 1 over option 2?
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