Question

True or false? mama's pies wants to add another store to sell its pastries. it costs $400,000 to build the new store and the new store will generate revenues of $450,000. because the cost to build is less than the generated revenues, mama's pies will add the store.

Answer 1

I feel like this is a trick question because it would not be that simple of a decision but if those were the only two things to consider then I guess it would be true. But in real life you would have to worry about employment costs, advertisement of the new store, who will manage each store when you are at the other store, etc. There would be so many more things going into that decision than just 450,000-400,000=50,000. But I would go with true.

Hope that helps.