Brookes Ltd is a market research company providing data to consumer goods companies about the markets in which they operate. In order to tender for a contract, they have undertaken some initial research for a personal-product manufacturer, costing £10,000. As the bidding process has been competitive, their fee has been set at £75,000. They have employed a market researcher on a temporary basis, with a salary of £5,000 per month. This can be terminated if the contract is turned down, but if they continue, it is expected that the researcher will stay for six more months. To undertake this project, they will need to purchase specialist software for £15,000 and will incur processing costs of £8,000, including IT, stationery, printing, and postage. They will be able to use existing staff to carry out interviews but will lose the contribution from another project of £14,000. The project will be charged with a cost to cover general overheads, calculated at 10% of fee income.

REQUIRED:

Assess whether they should they go ahead with the research project, by identifying the relevant revenue and costs and determining the net benefit or loss.