Surface Company sells square wooden blocks. A typical batch of 100 blocks has rough sides and costs $100 to produce. These rough blocks sell for $10 each. Surface Company can spend an additional $10 to sand down the sides of the blocks so that they are smooth and sell each smooth block for $15. What is the change to Surface Company's cash flow for a batch of blocks that it decides to process further into smooth blocks? Show a cash inflow as a positive number and a cash outflow as a negative number.
Surface Company sells square wooden blocks. A typical batch of 100 blocks has rough sides and costs $100 to produce. These rough blocks sell for $10 each. Surface Company can spend an additional $10 to sand down the sides of the blocks so that they are smooth and sell each smooth block for $15. What is the change to Surface Company's cash flow for a batch of blocks that it decides to process further into smooth blocks? Show a cash inflow as a positive number and a cash outflow as a negative number.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Surface Company sells square wooden blocks. A typical batch of 100 blocks has rough sides and costs $100 to produce. These rough blocks sell for $10 each.
Surface Company can spend an additional $10 to sand down the sides of the blocks so that they are smooth and sell each smooth block for $15.
What is the change to Surface Company's cash flow for a batch of blocks that it decides to process further into smooth blocks?
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