Janssen Company Has Old Inventory on Hand That Cost $24,000

question 144

Multiple Choice

Janssen Company has old inventory on hand that cost $24,000. Its scrap value is $32,000. The inventory could be sold for $80,000 if manufactured further at an additional cost of $24,000. What should Janssen do?

• A) Sell the inventory for $32,000 scrap value
• B) Dispose of the inventory to avoid any further decline in value
• C) Hold the inventory at its $24,000 cost
• D) Manufacture further and sell it for $80,000.

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Definitions:

Poisson Distribution

A probability distribution describing the likelihood of observing a certain number of events within a specified timeframe or area.

Hurricanes

Are intense tropical storms with powerful winds and heavy rain, characterized by a low-pressure center and numerous thunderstorms.

Probability

A measure of the likelihood that a particular event will occur, often expressed as a number between 0 and 1.

Poisson Distribution

A probability distribution that measures the likelihood of a given number of events happening in a fixed interval of time or space.