Assuming That the MR Corporation Has an Inventory of 200

question 5

True/False

Assuming that the MR Corporation has an inventory of 200 defective motors costing $450,000 to produce and $150,000 to repair,the repaired units can be sold for $275,000.The company receives an offer to purchase these motors for $100,000 before repairing them.The company's decision should be to sell the motors at the offered price.
The $450,000 production costs are sunk costs and therefore irrelevant to the decision.Net proceed from the sale of repaired units is $125,000 (Proceeds from sale of reworked units $275,000 - relevant costs for repair $150,000)compared to the offer to purchase for $100,000.Since the offer price is less than the net proceed from the sale of repaired units,the decision should be not to sell the motors at the offered price.

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Definitions:

Mental Health

A state of well-being in which an individual realizes his or her own abilities, can cope with the normal stresses of life, can work productively and fruitfully, and is able to make a contribution to his or her community.

Lifestyle Choices

Decisions individuals make about how to live and behave, including diet, exercise, leisure activities, and work, which can affect their health and well-being.

Physical Health

A state of well-being in which an individual realizes their own abilities, can cope with normal stresses of life, and is able to make a contribution to their community.

Type A

A personality type characterized by high levels of competitiveness, self-driven ambition, impatience, and urgency, often linked to stress and heart disease.