A company invested in the production of a new type of razor blade three years ag

Question

A company invested in the production of a new type of razor blade three years ago. The production has been implemented and the new razor blade has been sold for two years. The company chairman has asked the controller to perform an ex post audit of the investment in the new type of razor blade. An ex post audit is an examination of an investment after it has been made. The controller is complaining (!) that the chairman just wants her work overtime and no reason exists for this after-the-fact analysis. She points out that the investment already has been made and is now a sunk cost. How can an ex post audit of capital-budgeting decision assist an organization?

Explanation / Answer

A company invested in the production of a new type of razor blade three years ag

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