Suppose your company has just discovered $100,000 worth (this is the original manufacturing cost) of obsolete inventory
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Suppose your company has just discovered $100,000 worth (this is the original manufacturing cost) of obsolete inventory in an old warehouse. Your boss asks you to evaluate two options: (1) re-machine the obsolete parts at a cost of $30,000 and then hopefully resell them for $60,000 or (2) scrap them for $15,000 cash (which is certain) through a secondhand market. What recommendation would you make to your boss? Explain your reasoning.
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Related Book For
Engineering Economy
ISBN: 978-0133439274
16th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
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