What is the present discounted value of $100 received 3 years from now? Assume the interest rate is 9% and that interest is paid
1 answer:
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Answer:
The 23,000 units of Product A shall be processed further for Product B and Product C
Explanation:
In the given case we will do an analysis of Profit.
Without further processing:
Sales = $480,000
Cost = 23,000 $15 = $345,000
Profit = $135,000
In case of further processing
Sales = Product B + Product C
= 5,000 $107 + 11,300
$53
= $535,000 + $598,900 = $1,133,900
Cost = $345,000 + $290,000 = $635,000
Profit = $498,900
Since the profit in case of further processing is more than without processing further by $500,000 (635,000 - 135,000), thus Product B and Product C should be sold more than Product A.