Celtic Company Bought Three Used Machines Located in Toronto for $20,000,000

question 2

Essay

Celtic Company bought three used machines located in Toronto for $20,000,000. The arrangement with the seller is to move all the equipment to Celtic's factory in Edmonton. It is understood that some of the equipment will be sold as scrap or disassembled and used as spare parts. A careful inventory of all the equipment is shown below. Celtic's plans are to maximize the value of each item by using it in its most beneficial manner.
$$\begin{array} { | l | r | r | r | } \hline &{ \begin{array} { c } \text { Value if } \\\text { installed and } \\\text { operated }\end{array} } &{ \begin{array} { c } \text { Value as } \\\text { spare parts }\end{array} } & { \begin{array} { c } \text { Value } \\\text { as scrap }\end{array} } \\\hline \text { Machine A } & \$ 5,050,000 & \$ 3,950,000 & \$ 4,250,000 \\\hline \text { Machine B } & 3,990,000 & 4,040,000 & 740,000 \\\hline \text { Machine C } & \underline { 10,610,000 } & \underline { 10,410,000 } & \underline { 11,110,000 } \\\hline \text { Total } & \$ 19,650,000 & \$ 18,400,000 & \$ 16,100,000 \\\hline\end{array}$$ Required:
Allocate the purchase price among the assets acquired.

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Definitions:

Natural Consequences

Punishments enacted naturally as a consequence of the negative behavior.

Time-Out

A behavioral intervention technique where an individual is temporarily removed from an environment to decrease undesirable behaviors.

Cell Phone

A portable electronic device that combines telecommunications and computing functions, allowing for voice and data communication, as well as various applications.

Operant Conditioning

Shaping behavior through rewards and punishments.