Answer:
a.The marginal (added) benefits of the proposed new robotics.
b. The marginal (added) cost of the proposed new robotics.
c. The net benefit of the proposed new robotics.
d. What should Ken recommend that the company do? Why?
e. What factors besides the costs and benefits should be considered before the final decision is made?
Explanation:
Marginal cost benefit analysis refers to analyzing the additional benefits of a new project or activity compared to the benefits generated by an alternative project or activity.
In this case, both alternative should be evaluated as follows:
alternative 1 alternative 2 marginal
keep robotics change robotics benefits
revenue (in $446,000 $568,000 $122,000
today's $)
required invest. $0 -$227,200 -$227,200
old robotics $0 $73,000 $73,000
sales value
marginal benefits / losses -$32,200