Subasta Corporation was able to acquire second hand goods worth P100,000 in an auction. The goods can be sold as is for P120,000 or reconditioned at a cost of P30,000 and sold for P170,000. 1. Identify the irrelevant cost in this problem. Why? 2. Which alternative should be chosen: sell as is or recondition. Why? 3. What is the opportunity cost of reconditioning the goods. Why?
Subasta Corporation was able to acquire second hand goods worth P100,000 in an auction. The goods can be sold as is for P120,000 or reconditioned at a cost of P30,000 and sold for P170,000. 1. Identify the irrelevant cost in this problem. Why? 2. Which alternative should be chosen: sell as is or recondition. Why? 3. What is the opportunity cost of reconditioning the goods. Why?
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 9PA: Hong Publishing has purchased Lang Publishing. After reviewing titles from both companies, a...
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Subasta Corporation was able to acquire second hand goods worth P100,000 in an auction. The goods can be sold as is for P120,000 or reconditioned at a cost of P30,000 and sold for P170,000.
1. Identify the irrelevant cost in this problem. Why?
2. Which alternative should be chosen: sell as is or recondition. Why?
3. What is the opportunity cost of reconditioning the goods. Why?
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