Question
The firm Atlantis, LLC produces submarines as well as an essential input for that product: submarine hulls. Submarine hulls can be sold for a total
The firm Atlantis, LLC produces submarines as well as an essential input for that product: submarine hulls. Submarine hulls can be sold for a total of $14,000,605 monthly revenue. Finished submarines can be sold for a total monthly revenue of $40,690,000.
Converting submarine hulls into completed submarines requires machinery and labor. The machinery is leased for $10,000,000 per month, and labor salaries are $17,000,000 per month. About $2,000,000 of other costs per month are also incurred.
Which of them following is TRUE?
a. | It is $2,310,605 LESS profitable to sell the input rather than processing it further.
| |
b. | It is $11,690,000 MORE profitable to sell the input rather than processing it further.
| |
c. | It is $11,690,000 LESS profitable to sell the input rather than processing it further. | |
d. | It is $2,310,605 MORE profitable to sell the input rather than processing it further. |
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