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.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 4EA: Assume a company is going to make an investment of $450,000 in a machine and the following are the...

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