A manager invests $20,000 in equipment that would help the company reduce it's per unit costs from $15 to $12 . He expects the equipment to be in use for the next seven years. After two years, he realizes that if he outsourced the production, the unit cost would be $7 instead. At this point what should the senior manager do?
a. Charge the manager for the next five years of depreciation
b. Write off the equipment as sunk cost and allow for outsourcing since it is cheaper
c. Not allow for outsourcing since the equipment is good for another five years
d. None of the above
b
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We measure gross domestic product by multiplying the quantities of goods by their prices because it allows us to
A) calculate the total number of units of goods produced in an economy. B) correct for inflation. C) directly compare the output of one economy to that of another. D) express the values of products in a common unit of measurement.
Using Figure 2 below, suppose that the economy started at PAE2. A potential change that could cause the economy to go from PAE2 to PAE1 might be:
A. consumption increases.
B. investment increases.
C. export increase.
D. government spending decreases.
A characteristic of a 45-degree line is that
A) any point on the line is equidistant from the two axes. B) it bisects a right angle. C) its slope is 1. D) a and c E) a, b, and c
Which of the following is not an automatic stabilizer?
a. the minimum wage b. the unemployment compensation system c. the federal income tax d. the welfare system