3. A Memphis startup is providing software for medical diagnostic imaging. Employees work 40% with Python...
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3. A Memphis startup is providing software for medical diagnostic imaging. Employees work 40% with Python programming and 60% with diagnostic imaging. The firm is considering investing in on-the-job- training (OJT) that would raise the productivity of its workers. OJT could focus on diagnostic imaging, Python programming, or both. The cost of OJT is $5,000 per person, regardless of focus. Every worker is currently being paid according to their productivity. Productivity per worker is $20,000 per employee before OJT. Employees can leave the firm after OJT and their skills in the outside option are valued as; Python 60%, diagnostic imaging 40%. Return on investment in Python and diagnostic imaging are given by the table below. Stay Leave Task Potential increase Weight (%) in productivity Value of Weight (%) Value of training 3.2 100% Python training Python Diagnostic imaging 8. 40% 60% 40% 4.8 0. 60% 40% Python/ 60% Diagnostic Diagnostic imaging Python 4 40% 60% 60% 1.6 3.6 2.4 2.4 6. 40% imaging 100% Python 0. 60% 40% 0. Diagnostic imaging Diagnostic imaging 8 60% 4.8 40% 3.2 a. (5 points) If the employee receives mixed training according to the table above, what is the total increase in productivity if the employee stays? What will be the employee's new wage, assuming they are still paid according to their productivity? b. (5 points) If the employee receives mixed training according to the table above, what is the total increase in productivity if the employee leaves? What will be the employee's new wage, assuming they are paid according to their productivity in the labor market? c. (5 points) Assume the employee receives mixed training according to the table above. Give an example of how to split the costs and the return as to mitigate a potential holdup problem. 3. A Memphis startup is providing software for medical diagnostic imaging. Employees work 40% with Python programming and 60% with diagnostic imaging. The firm is considering investing in on-the-job- training (OJT) that would raise the productivity of its workers. OJT could focus on diagnostic imaging, Python programming, or both. The cost of OJT is $5,000 per person, regardless of focus. Every worker is currently being paid according to their productivity. Productivity per worker is $20,000 per employee before OJT. Employees can leave the firm after OJT and their skills in the outside option are valued as; Python 60%, diagnostic imaging 40%. Return on investment in Python and diagnostic imaging are given by the table below. Stay Leave Task Potential increase Weight (%) in productivity Value of Weight (%) Value of training 3.2 100% Python training Python Diagnostic imaging 8. 40% 60% 40% 4.8 0. 60% 40% Python/ 60% Diagnostic Diagnostic imaging Python 4 40% 60% 60% 1.6 3.6 2.4 2.4 6. 40% imaging 100% Python 0. 60% 40% 0. Diagnostic imaging Diagnostic imaging 8 60% 4.8 40% 3.2 a. (5 points) If the employee receives mixed training according to the table above, what is the total increase in productivity if the employee stays? What will be the employee's new wage, assuming they are still paid according to their productivity? b. (5 points) If the employee receives mixed training according to the table above, what is the total increase in productivity if the employee leaves? What will be the employee's new wage, assuming they are paid according to their productivity in the labor market? c. (5 points) Assume the employee receives mixed training according to the table above. Give an example of how to split the costs and the return as to mitigate a potential holdup problem.
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5 a Initial worker productivity 20000 per worker If the employee continues the gain in productivity ... View the full answer
Related Book For
Accounting for Decision Making and Control
ISBN: 978-0078025747
8th edition
Authors: Jerold Zimmerman
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