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North Park University Operations And Supply Chain Management Assignment Help - Disposal of assets

Question - Disposal of assets. Answer the following questions.
1. A company has an inventory of 1,100 assorted parts for a line of missiles that has been
discontinued. The inventory cost is $78,000. The parts can be either
(a) Remachined at total additional costs of $24,500 and then sold for $33,000 or
(b) Sold as scrap for $6,500. W hich action is more profitable? Show your calculations.
2. A truck, costing $101,000 and uninsured, is wrecked its first day in use. It can be either
(a) Disposed of for $17,500 cash and replaced with a similar truck costing $103,500 or
(b) Rebuilt for $89,500, and thus be brand-new as far as operating characteristics and looks are
concerned. W hich action is less costly?
Show your calculations.

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