The two companies In Case and Wrap it up are involved in manufacturing and gift wrapping service respectively. Their numbers and data are given as follows:
Given
Data of In case
Rent: $1,500
Employee requirement: 2
Inventory expenses: $2,000
Equipment expenses: $4,500
Data of Wrap It Up
Rent: $1,500
Employee requirement: 5
Inventory expenses: $1,500
Equipment expenses: $2,500
The data of Wrap It Up and In case when compared , shows that the rent for both the businesses is same. The labor requirement is more in Wrap It Up than that of In Case.
The capital requirements are more for In Case and comparatively less for Wrap It Up in the long term.
Therefore the correct statement is " In Case will require a less costly investment in labor, while Wrap It Up will require less capital in the long term" OPTION A is correct.
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