Champ Motorcycles is considering whether to expand Into Germany. If gas prices Increase, the
company expects more interest in fuel-efficient transportation such as motorcycles, As a result,
the company is considering setting up a motorcycle assembly plant on the outskirts of Berlin Champ Motorcycles estimates it will cost $860,000 to convert an existing building to motorcycle production. Workers will need training, at a total cost of $55,000. The additional costs to organize the business and to establish relationships is estimated to be $160,000. The CEO believes the company can earn profits from this expansion (before considering the costs In the preceding paragraph) of $1,670,000.
Use cost-benefit analysis to determine whether Champ should expand Into Germany?