Suppose your company has just found $100,000 worth of outdated inventory in an old warehouse (this is the original manufacturing cost). Your boss asks you to consider two options: (1) re-engineer the outdated parts at a cost of $30,000, and ideally resell them for $60,000, or (2) scrap them for $15,000 cash (which is certain) in a second-hand market. What advice would you give your boss? Explain in your own words and give the data that supports your answer.
Suppose your company has just found $100,000 worth of outdated inventory in an old warehouse (this is the original manufacturing cost). Your boss asks you to consider two options: (1) re-engineer the outdated parts at a cost of $30,000, and ideally resell them for $60,000, or (2) scrap them for $15,000 cash (which is certain) in a second-hand market. What advice would you give your boss? Explain in your own words and give the data that supports your answer.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Suppose your company has just found $100,000 worth of outdated inventory in an old warehouse (this is the original
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