Homework Help is Here – Start Your Trial Now!
Engineering
Electrical Engineering
Suppose your company has just discovered $90,000 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 $29,000 and then hopefully resell them for $62,000 or​ (2) scrap them for $14,500 cash​ (which is​ certain) through a secondhand market. What recommendation would you make to your​ boss?

Suppose your company has just discovered $90,000 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 $29,000 and then hopefully resell them for $62,000 or​ (2) scrap them for $14,500 cash​ (which is​ certain) through a secondhand market. What recommendation would you make to your​ boss?

Introductory Circuit Analysis (13th Edition)
Introductory Circuit Analysis (13th Edition)
13th Edition
ISBN:9780133923605
Author:Robert L. Boylestad
Publisher:Robert L. Boylestad
Chapter1: Introduction
Section: Chapter Questions
Problem 1P: Visit your local library (at school or home) and describe the extent to which it provides literature...
See similar textbooks
icon
Related questions
Question

Suppose your company has just discovered $90,000 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 $29,000 and then hopefully resell them for $62,000 or​ (2) scrap them for $14,500 cash​ (which is​ certain) through a secondhand market. What recommendation would you make to your​ boss?

Suppose your company has just discovered $90,000 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 $29,000 and then hopefully resell them for $62,000 or (2) scrap them for $14,500 cash (which is certain) through a secondhand market. What recommendation would you make to your boss? Select all that apply. O A. Choose option (1), even if the remachined parts can be surely sold for at least $43,501. O B. Choose option (1), if the value of remachining is reasonably certain. O C. Choose option (2), if management is highly risk-averse. O D. Choose option (2), if management is risk-neutral. O E. Choose option (1), even if the remachined parts can be surely sold for at least $14,501. Click to select your answer(s).
Transcribed Image Text:Suppose your company has just discovered $90,000 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 $29,000 and then hopefully resell them for $62,000 or (2) scrap them for $14,500 cash (which is certain) through a secondhand market. What recommendation would you make to your boss? Select all that apply. O A. Choose option (1), even if the remachined parts can be surely sold for at least $43,501. O B. Choose option (1), if the value of remachining is reasonably certain. O C. Choose option (2), if management is highly risk-averse. O D. Choose option (2), if management is risk-neutral. O E. Choose option (1), even if the remachined parts can be surely sold for at least $14,501. Click to select your answer(s).
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Logic Gate and Its Application
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, electrical-engineering and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Introductory Circuit Analysis (13th Edition)
Introductory Circuit Analysis (13th Edition)
Electrical Engineering
ISBN:
9780133923605
Author:
Robert L. Boylestad
Publisher:
PEARSON
Delmar's Standard Textbook Of Electricity
Delmar's Standard Textbook Of Electricity
Electrical Engineering
ISBN:
9781337900348
Author:
Stephen L. Herman
Publisher:
Cengage Learning
Programmable Logic Controllers
Programmable Logic Controllers
Electrical Engineering
ISBN:
9780073373843
Author:
Frank D. Petruzella
Publisher:
McGraw-Hill Education
Fundamentals of Electric Circuits
Fundamentals of Electric Circuits
Electrical Engineering
ISBN:
9780078028229
Author:
Charles K Alexander, Matthew Sadiku
Publisher:
McGraw-Hill Education
Electric Circuits. (11th Edition)
Electric Circuits. (11th Edition)
Electrical Engineering
ISBN:
9780134746968
Author:
James W. Nilsson, Susan Riedel
Publisher:
PEARSON
Engineering Electromagnetics
Engineering Electromagnetics
Electrical Engineering
ISBN:
9780078028151
Author:
Hayt, William H. (william Hart), Jr, BUCK, John A.
Publisher:
Mcgraw-hill Education,
SEE MORE TEXTBOOKS