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This post addresses benefits of keeping a plant open.

Rosenblatt Enterprises used decision tree analysis and cost-benefit analysis in their decision to keep open their current plant. The quantitative costs of keeping the plant open were $5,000,000, while the quantitative benefits of keeping the plant open were only $3,000,000. Rosenblatt decides to keep the plant open. The decision to keep the plant open is appropriate if:

a Additional qualitative benefits exceed $2,000,000
b The relevant costs less the benefits of closing the plant were greater than $2,000,000
c It would never be appropriate
d Both A & B

Solution Preview

B wouldn't make sense. The quant. costs are 5,000,000 and the benefits are 3,000,000. If we consider B, we would ...

Solution Summary

This solution provides the correct answer and explanation to the following question:

Rosenblatt Enterprises used decision tree analysis and cost-benefit analysis in their decision to keep open their current plant. The quantitative costs of keeping the plant open were $5,000,000, while the quantitative benefits of keeping the plant open were only $3,000,000. Rosenblatt decides to keep the plant open. The decision to keep the plant open is appropriate if:

a Additional qualitative benefits exceed $2,000,000
b The relevant costs less the benefits of closing the plant were greater than $2,000,000
c It would never be appropriate
d Both A & B

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