Cindy's Limo Service provides transportation services in and around Middleville.Its profits have been declining,and management is planning to add a package delivery service that is expected to increase revenue by $275,000 per year.The total cost to lease additional delivery vehicles from the local dealer is $60,000 per year.The present manager will continue to supervise all services.Due to expansion,however,the labor costs and utilities would increase by 40%.Rent and other costs will increase by 15%.
Required:
Prepare a report of the differential costs and revenues if the delivery service is added.Should management start up the delivery service? Explain your answer.

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