Five years ago, Mahmoud Manufacturing Corporation purchased expensive packaging equipment for $150,000 and subsequently added $100,000 in improvements to make the equipment fit company requirements. The current book value of the equipment is $200,000. There are two options for future use of the property: 

1) The equipment can be sold today for $400,000 after-tax. 

2) The equipment can be modified for another $50,000 and used in packaging a new product project

Answer rating: 100% (QA)

To make a decision between the two options lets analyze the financial implications of each Option 1 ... View the full answer