Author Question: A manager invests 20,000 in equipment that would help the company reduce it's per unit costs from 15 ... (Read 68 times)

scienceeasy

  • Hero Member
  • *****
  • Posts: 565
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

Question 2

A firm that acquires a substitute product can try to reduce inter-product cannibalization by
 a. Doing nothing
 b. Repositioning its product or the substitute so that they do not directly compete with each other
  c. Pricing each product at the same level
 d. Lowering the prices on both the products



kthug

  • Sr. Member
  • ****
  • Posts: 332
Answer to Question 1

b

Answer to Question 2

b



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Every 10 seconds, a person in the United States goes to the emergency room complaining of head pain. About 1.2 million visits are for acute migraine attacks.

Did you know?

When blood is exposed to air, it clots. Heparin allows the blood to come in direct contact with air without clotting.

Did you know?

Urine turns bright yellow if larger than normal amounts of certain substances are consumed; one of these substances is asparagus.

Did you know?

Walt Disney helped combat malaria by making an animated film in 1943 called The Winged Scourge. This short film starred the seven dwarfs and taught children that mosquitos transmit malaria, which is a very bad disease. It advocated the killing of mosquitos to stop the disease.

Did you know?

In 1844, Charles Goodyear obtained the first patent for a rubber condom.

For a complete list of videos, visit our video library