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) remachine 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.
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) remachine 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.
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter15: Decision Analysis
Section: Chapter Questions
Problem 5P: Hudson Corporation is considering three options for managing its data warehouse: continuing with its...
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Suppose your company has just discovered $100,000 worth (this is the original
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