You own a small boutique that sells scented soaps and lotions as well as handmade jewelry. You are considering moving locations to a higher-traffic area of town. You believe this will increase your contribution margin from $127,000 to $218,000 per year. Rent, however, will increase by $400 per month, and utilities will increase by $150 per month. You will also need to hire two additional employees at a cost of $24,000 each annually.
Should you make the move?
A. Yes, because profit would increase by $84,400 annually.
B. Yes, because profit would increase by $36,400 annually.
C. No, because profit would decrease by $48,000 annually.
D. No, because profit would decrease by $6,600 annually.
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