Response to the following problem:
Concert Sounds has damaged some custom speakers that cost the company $10,000 to manufacture. Owner Jim Buffett is considering two options for disposing of this inventory. One plan is to sell the speakers as damaged inventory for $2,500. The alternative is to spend an additional $500 to repair the damage and expect to sell the speakers for $3,100. What should Buffett do?
Support your answer with an analysis that shows expected net revenue under each alternative.