The small family company that you manage has invested $35,000 in developing a new product, but the development is not quite finished. At a recent meeting, your family company management team predicts that the introduction of competing products has reduced the expected sales of your new product to $30,000. If your company receives zero profit for an unfinished product, and if it would cost $10,000 to finish development and make the product, you most your family company should spend to complete development is go ahead and do so. The O should; $30,000 - should; $20,000 should; $10,000 should not; $0

The small family company that you manage has invested $35,000 in developing a new product, but the development is not quite finished. At a recent meeting, your family company management team predicts that the introduction of competing products has reduced the expected sales of your new product to $30,000. If your company receives zero profit for an unfinished product, and if it would cost $10,000 to finish development and make the product, you most your family company should spend to complete development is go ahead and do so. The O should; $30,000 - should; $20,000 should; $10,000 should not; $0

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The small family company that you manage has invested $35,000 in developing a new product, but
the development is not quite finished. At a recent meeting, your family company management team
predicts that the introduction of competing products has reduced the expected sales of your new
product to $30,000. If your company receives zero profit for an unfinished product, and if it would
cost $10,000 to finish development and make the product, you go ahead and do so. The
most your family company should spend to complete development is
O should; $30,000
O should; $20,000
O should; $10,000
O should not; $0

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