Question
. Company A is considering investing in a piece of equipment that would simplify and streamline customer service transactions. Management has determined that the benefit
. Company A is considering investing in a piece of equipment that would simplify and streamline customer service transactions. Management has determined that the benefit of investing in the equipment is $216,000. The system will require the company to invest $85,000 for equipment. In addition, the company will incur costs of $100,000 to get the system up and running. Which of the following statements is correct? Company A should invest in the equipment because the benefits exceed the costs by $31,000. Company A should not invest in the equipment because costs will increase by $185,000. Company A should invest in the equipment because the benefits exceed the costs by $131,000. Company A should not invest in the equipment because customer service costs are not considered part of the value chain.
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