The owner of a herd of goats successfully rented part of his herd to clear land in the nearby resort. Clearing land resort work aroused a small profit, and now the owner of evaluating the prospects of trade with the similar land clearing projects in the area. The owner believes that the profitability of this business is constrained by the size of the truck and trailer used to transport the goats to the workplace. He reasons that more trucks and trailers will allow it to carry more goats to and from work each day, creating additional revenue. He also realizes that the big trucks and trailers will increase operating costs. The owner determines the investment required to upgrade trucks and trailers. He then has to determine if additional revenues and costs associated with large trucks and trailers to justify the initial investment. This case is a realistic analysis of the additional income and expenses in the context of the capital budget. (B) the case can be used independently of the (A) If the professor wants to focus solely on the capital budget. "Hide
by David Carr, Kyle S. Meyer Source: Richard Ivey School of Business Foundation 6 pages. Publication Date: December 13, 2011. Prod. #: W11569-PDF-ENG
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