Unformatted text preview: will LOSE by raising wages is $20,925 - $8,460 = 12,465. 3. A) 4.5 minutes B) The Cashier is busy 80% of the time and the coffee makers are busy 83.3% of the time. 4. Factory Choice-$6 mil + ($12mil)(.4)= -$1.2 million-$6 mil + ($10mil)(.6)= $0-$9 mil + ($14mil)(.4)= -$3.4 million-$9 mil + ($10mil)(.6)= -$3 million Ideally, the company should reframe from constructing a new factory because the risk associated with the unfavorable probability of demand shows potential for an enormous loss on the company’s part. However, if the company chooses to build, it should build the smaller factory, because in the best case scenario, they will break even and in the worse case scenario they will lose only $1.2 million as opposed to losses that are roughly 3 times that amount facing the larger facility....
View Full Document
- Spring '07
- Management, Million, $0, Yearly Cost, $14,580