Custom 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.

Custom Motorcycles estimates it will cost $930,000 to convert an existing building to motorcycle production. Workers will need training, at a total cost of $90,000.

The additional costs to organize the business and to establish relationships is estimated to be $190,000.

The CEO believes the company can earn profits from this expansion (before considering the costs in the preceding paragraph) of $1,776,000.

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