Overview
Extent Decisions and Investment Decisions
Assignment Overview
Managers make decisions every day regarding how much to produce, how much to invest,
and whether an investment will generate long-term value. In this assignment, you will apply
the concepts from Chapters 4 and 5 to evaluate a real-world business decision using
economic reasoning.
Scenario
Select one of the following organizations: Amazon, Starbucks, Tesla, Walmart, Apple, Costco,
or another company approved by your instructor.
Assume you have been hired as a managerial economics consultant to advise the company's
leadership on an important business investment decision such as opening a new facility,
expanding into a new market, purchasing technology, launching a new product, investing in
AI/automation, or hiring additional employees.
Assignment Instructions:
Write a 3–4 page APA-formatted paper (excluding title and reference pages) addressing the
following:
Part 1: Company Background
Briefly describe the company. Identify the investment or expansion decision. Explain why this decision is important to the company's future.
Part 2: Extent Decision Analysis Explain what an extent decision is. Identify the marginal benefits of the investment. Identify the marginal costs. Determine the point at which the company should continue investing or stop investing. Support your recommendation with economic reasoning.Part 3: Investment Decision Analysis
Discuss expected future costs and benefits. Evaluate risks associated with the investment. Discuss opportunity costs. Compare short-term versus long-term impacts. Determine whether the investment creates long-term value.Part 4: Recommendation
State whether the investment should move forward. Explain why or why not. Support your recommendation with economic evidence. Identify factors management should continue monitoring.Part 5: Reflection
Discuss the most challenging aspect of making your recommendation. Explain how managerial economics improves strategic decision-making.Requirements
3–4 full pages of content APA 7th edition formatting Minimum of three scholarly or credible business sources (the course textbook may beone source)
Include in-text citations and a reference page Submit as a Microsoft Word document