A company has a process that results in 15,000 pounds of Product A that can be sold for $8 per pound. An alternative would be to process Product A further at a cost of $100,000 and then sell it for $14 per pound. Should management sell Product A now or should Product A be processed further and then sold? What is the effect of the action?
Process further, the company will be better off by $10,000.
Sell now, the company will be better off by $10,000.
Process further, the company will be better off by $90,000.
Sell now, the company will be better off by $100,000.