Predict the impact on profitability


Problem: You are a manager of a chemical company. An accident has occurred in which chemicals leaked into the ground water nearby. The community is unaware of the accident.

1. Compare the primary costs involved in cleaning up the water immediately (and thus confessing) versus hiding your culpability now and possibly paying more in the future.

2. Predict the impact on profitability in both situations. Justify your response.

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Managerial Economics: Predict the impact on profitability
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