An Al Lab company has offered to be the AI expert partner in PENSONIC effort to market the IOT system for smart house.They offer to just provide PENSONIC with an overall 20% profit margin on all AI system sold to its client.All Pensonic need to do is to market the service ,a nd the AI -Lab team will do follow up with the client directly and install the system at their own expenses completely .All of the current PENSONIC staff (except marking) and offices of PENSONIC Al Division will be manned by the Al-Lab team and this will reduce PENSONICs operating overheads by RM1,500,000 per month.The estimated contract value of AI system work that can be obtain by the PENSONIC marketing team in the project is RM 120,000,000 per annum with the total materials and direct labour costs estimated to be at RM 85,000,000.

Required:

Should PENSONIC accept the offer? Show calculation.

What are the qualitative considerations to be taken into account in the decision?