A company has a process that results in 15,000 pounds of Product A that can be s

Question

A company has a process that results in 15,000 pounds of Product A that can be sold for $16 per pound. An alternative would be to process Product A further at a cost of $200,000 and then sell it for $28 per pound. Should management sell Product A now or should Product A be processed further and then sold? What is the effect of the action? Question 19 options: Sell now, the company will be better off by $20,000. Process further, the company will be better off by $180,000. Process further, the company will be better off by $20,000. Sell now, the company will be better off by $200,000. A company has a process that results in 15,000 pounds of Product A that can be sold for $16 per pound. An alternative would be to process Product A further at a cost of $200,000 and then sell it for $28 per pound. Should management sell Product A now or should Product A be processed further and then sold? What is the effect of the action? A company has a process that results in 15,000 pounds of Product A that can be sold for $16 per pound. An alternative would be to process Product A further at a cost of $200,000 and then sell it for $28 per pound. Should management sell Product A now or should Product A be processed further and then sold? What is the effect of the action? Sell now, the company will be better off by $20,000. Process further, the company will be better off by $180,000. Process further, the company will be better off by $20,000. Sell now, the company will be better off by $200,000. Sell now, the company will be better off by $20,000. Process further, the company will be better off by $180,000. Process further, the company will be better off by $20,000. Sell now, the company will be better off by $200,000. Sell now, the company will be better off by $20,000. Process further, the company will be better off by $180,000. Process further, the company will be better off by $20,000. Sell now, the company will be better off by $200,000.

Explanation / Answer

Sell now, the company will be better off by $20,000.

if itsell without process 15000*16=240000

if it processes and sell 15000*28=420000

total difference =420000-240000=180000

amount invested further=200000

so net loss=200000-180000=20000

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