As Amazon's sales and corresponding shipping volume increase, there is increased pressure on logistics. If there is no proportional increase in staffing and machinery nor an exogenous advance in technology, this necessarily must be compensated for by increasing the work rate. Therefore logically, doubling the warehouse space, machinery, and manpower should likewise result in a halving of production rates, thus decreasing injuries and other worker complaints. But this would adversely impact Amazon's financials. Fully explain the impact of a doubling of Amazon's labor and fixed assets on Net Income, Total Asset Turnover, and the Return on Equity. Should Amazon pursue this solution? Why or why not?

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The impact of doubling Amazons labor and fixed assets on its financial performance can be analyzed as follows 1 Net Income Doubling the labor and fixed assets would lead to a significant increase in A... View the full answer