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5. Gamma Corporation, one of the firms that retains you as a financial analyst, is con- sidering buying out Beta Corporation, a small manufacturing firm
5. Gamma Corporation, one of the firms that retains you as a financial analyst, is con- sidering buying out Beta Corporation, a small manufacturing firm that is now barely operating at a profit. You recommend the buyout because you believe that new man- agement could substantially reduce production costs, and thereby increase profit to a quite attractive level. You collect the following product information in order to con- vince the CEO at Gamma Corporation that Beta is indeed operating inefficiently: MP = 10 P, = $20 MP = 15 P = $15
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