Torque engine company is considering opening a plant in china. it will cost $3,500,000 to set up the plant and $800,000 to train employees. an additional $160,000 will be spent to build relationships with the local suppliers. the company anticipates gross profit of $4,500,000 from this new plant. do the benefits outweigh the costs or do the costs outweigh the benefits, and by how much?

In the given problem the company is considering opening a plant in China which shall provide the anticipated gross profit of $4,500,000. The costs of the project include

$3,500,000 to set up the plant and $800,000 to train employees, and an additional $160,000 to build relationships with the local suppliers.

So the total cost of project is 3,500,000+800,000+160,000 = $4,140,000

Now the net benefit from the project shall be 4500,000 – 4140,000 = $360,000

Hence we can say that the benefits outweigh the costs by $360,000.

answer; (a) conduct a worksite inspection;