Answer to Question #8995 in Economics of Enterprise for king
The following are some additional facts about the alternatives and current situation:
1. The company has a 75% chance of surviving the next two years.
2. Leasing the new space for two years at the current location in Chicago would cost $750,000 per year.
3. Moving the entire operation to a Midwest town would cost $1 million. Leasing space would run only $500,000 per year.
4. Moving to a new building in Chicago would cost $200,000, and leasing the new building’s space would cost$650,000 per year.
5. The company can cancel the lease at any time.
6. The company will build its own building in five years, if it survives.
7. Assume all other costs and revenues are the same no matter where the company is located.
What should E-Education do?
Need a fast expert's response?Submit order
and get a quick answer at the best price
for any assignment or question with DETAILED EXPLANATIONS!