Managerial Economicsintermediate
Arrange the steps for evaluating a proposed production investment in the correct chronological order.
Answer
Identify the investment project and define its operational purpose, Determine required physical resources, equipment, and labor, Analyze expected production costs and potential market demand, Make the final decision on project feasibility and funding
Explanation
### The order
1. **Identify the proposed investment and its purpose**: the manager must know what opportunity is being assessed.
2. **Assess workers, equipment, and other required inputs**: this establishes whether the project can be operated.
3. **Compare expected costs and market prospects**: production is only worthwhile if costs and likely demand support it.
4. **Decide whether the investment is feasible and sustainable**: the conclusion follows from the evidence and comparison.
### Remember
Define the project, check production requirements, examine its market, then decide.
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