Case Solution for Goats: The Green Alternative (B)

Complete Case details are given below :
Case Name :      Goats: The Green Alternative (B)
Authors :           David Currie, Kyle S. Meyer
Source :             Ivey Publishing
Case ID :            W11569
Discipline :        Accounting
Case Length :    06 pages
Solution Sample availability : YES
Plagiarism : NO (100% Original work)
Description for case is given below :
The owner of a goat herd had successfully rented a portion of his herd to clear land at a nearby resort. The resort land clearing job generated a small profit and now the owner is evaluating the prospects of bidding on similar land clearing projects in the area. The owner believes that profitability for this line of business is constrained by the size of the truck and trailer used to transport the goats to the job site. He reasons that a larger truck and trailer would allow him to transport more goats to the job site each day, generating incremental revenues. He also realizes that a larger truck and trailer would result in increased operating costs. The owner determines the investment needed to upgrade the truck and trailer. He must then determine if incremental revenues and costs associated with the larger truck and trailer would justify the initial investment. This case provides a realistic analysis of incremental revenues and costs in the context of capital budgeting.
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