Suppose that a product can be sold at split-off for $5,000 or processed further at a cost of $1,000 and then sold for $6,400. Should the product be processed further?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter23: Other Topics In Working Capital Management
Section: Chapter Questions
Problem 6MC
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Suppose that a product can be sold at split-off for $5,000 or processed further at a cost of $1,000 and then sold for $6,400. Should the product be processed further?

 

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Decision to Sell before or after additional processing
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