Chris LeBlanc estimates that if he does 5 hours of research using data that will cost $75, there is a good chance that he can improve his expected return on a $10,000, 1-year investment from 8% to 10%. Chris feels that he must earn at least $20 per hour on the time he devotes to his research.
a. Find the cost of Chris’ research.
b. By how much (in dollars) will Chris’ return increase as a result of the research?
c. On a strict economic basis, should Chris perform the proposed research?