Question
Your winery currently operates on 20 acres, the average size of a vineyard in the region. You have a staff of 10 vineyard workers. You
Your winery currently operates on 20 acres, the average size of a vineyard in the region. You have a staff of 10 vineyard workers. You are debating either hiring one additional vineyard worker or renting a 5-acre plot of land from the vineyard owner next to yours (so the acreage would be 25 continuous acres), with the aim of expanding your business and profitability. Hiring an additional vineyard worker allows you to farm the land more intensively, resulting in an additional 45 barrels of wine while costing 9,000 in wages for the season. Alternately, renting the additional 5-acre plot results in an additional 100 barrels of wine, but rent for the 5-acre plot is not yet known because it has to be negotiated with the owner. Your sister intuitively thinks that renting the 5-acre plot is the right business decision and wants to know your opinion. What do you recommend?
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