Suppose that Lincoln is currently producing and selling 300.000 units per year. Lincoln Ironworks is considering eliminating the salary paid to manufacturing workers and replacing it with a piece rate of 510 per unit in the hopes of increasing output and sales to 300.000 + D units per year. What is the minimum value of D for which changing the compensation system is economically justified?
Question 4 4 pts
Suppose that Lincoln decides not to change its compensation plan. Lincoln is considering investing 56.000.000 in capital improvements that will improve working conditions on the premises for the next 20 years in the hopes of boosting output. The capital improvements would be depreciated on a straight-line basis over the next 20 years. Annual output and sales with improved working conditions would be 300.000+ d units. What is the minimum value of d that Lincoln would have to achieve for the new investment to be economically justified?

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