The owner of a goat herd must decide whether to rent the herd for a land-clearing project at a nearby resort. Goats are better suited to clearing the land than humans and machines would be, but the owner has never rented the goats for such a purpose. The owner must identify costs associated with the project, then must determine a price to charge for the service. Since the owner has no prior experience renting livestock, he must come up with estimates of the incremental costs associated with the rental operation and prepare a bid with little knowledge of rates charged by competitors for goat rentals. This case provides a realistic example of the thought processes that business owners go through when evaluating whether to expand into complementary lines of business or entrepreneurs contemplating starting a new business.
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