Question

An organization is considering expanding its services that will require the opening of another facility. What steps would you take to make sure this is a viable option? What costs must be considered? How would you go about evaluating the potential expansion?

Answer 1

frequency of customer: As customer is growing year on year basis and repeated purchases made by customer it shows the goodwill of business and now to use that goodwill and serve to more customer.

cost: how much cost we are going to incur and how much time it takes to recover the money. it is mandatory to check on cost as an investor you always look for returns.

substitute of your product: If you are selling unique product no need of expansion but there is substitute of product then we need to do expansion.

place where all resouces are availabe for our business

cost of time value is to be considered while you are investing. As there are lots of investment opportunity in market so we need to precisely choose whether to expand our work or invest in other opportunity.

you can evaluate your expansion investment with return and other investment and there return.choose the investment which gives you better return according to time value of money.