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3. [15] Suppose your company has just discovered $100,000 worth (this is the original manufacturing cost) worth of obsolete inventory in an old warehouse. You have been asked to evaluate the companys options which are: 1) re-machine the obsolete parts at a cost of $30,000 and hope and sell them for an expected $60,000, or 2) scrap the parts and obtain $15,000 from a scrap dealer. What is the best option in your opinion and why
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AnsweV ciuenthat The value of invenkory Found is l00 000 The Cost of re-machine For the obsolete porti$301000 The expec ted vesale vale iss Goo0o Scvap Sold in Second -hand market For SIsooo Dvotit on re- macnine ching the obsolete inventory sbock wduid Re-ma Cost s 301 an these re -machine products would be Sol d Fsr $ 6st 000 Hen ei the ex pected p oh re-mas hine is 30 o00 :000- 30,000) scvaping out the absoiete inventor stock in Second hand market is Jone For IS0henheepeted ince the pvotit ?enevated mre-mochine is g reater than the Pofit genevated f vom Scraping aut the ventor y the option of re- machine IS YCComrn ended

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