Longview Baskets has in its inventory 2,000 damaged baskets that cost $20,000. The baskets can be sold in their present condition for a total of $12,000, or repaired at a cost of $7,000 and sold for a total of $25,000. What is the opportunity cost of selling the baskets in their present condition? Would we Sell As Is or Process Further?
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Sales
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$10,000,000
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Operating income
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2,400,000
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Total assets
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2,500,000
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Current liabilities
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920,000
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Assume the Air Conditioning division of the General Appliance Corporation had the following results last year (in thousands). Management's target rate of return is 12% and the weighted average cost of capital is 10%. Its effective tax rate is 35%.