Increase the wage bill and reduce its profits

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Reference no: EM131095481

About this question : A recent industry report concluded that the global demand for the good X is expected to increase. Based on the demand projections given in the report Colaba, a firm that produces and sells X, is contemplating hiring more labor to increase production. Maria Williams and Christopher Lockhart, both stock market analysts, are discussing the prospects of the firm. Maria thinks that Colaba is a good stock to buy because she expects their profits to increase. Christopher’s opinion differs. He says that an increase in Colaba’s workforce will only increase the wage bill and reduce its profits. which of the following would weaken Christopher's opinion? a. Employee turnover in Colaba's research and development team has always been higher than the industry average. b. the growth in Colaba's earnings has declined in the last few quarters. c. The distribution network for good X IS HIGHLY FRAGMENTED. d. Colaba recently restructed the shop floor layout which reduced the production cycle and the percentage of defective units. e. Colaba follows an assembly line method of production that is efficient.

Reference no: EM131095481

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