Bill Berry, transportation sales manager of Speedy Trucking Company, has considered serving a new customer, El Conquistador, Inc., an importer of Venezuelan goods, by hauling 12 truckloads of product each month from the receiving port in Bayonne, New Jersey, to a distributor in Pittsburgh, Pennsylvania, for $850 per truckload. Each serving truck must depart from the Speedy terminal in Secaucus, New Jersey, 12 miles from the seaport. The distance from Bayonne to Pittsburgh is 376 miles. Upon unloading at Pittsburgh, trucks return empty (deadhead) to the Secaucus terminal 380 miles from the distributor.

If it costs Speedy an average of $1.20 per mile to operate a truck, should Mr. Berry accept the business at the negotiated rate? Why or why not?

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