Author Question: A manager invests 20,000 in equipment that would help the company reduce it's per unit costs from 15 ... (Read 75 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?

GI conditions that will keep you out of the U.S. armed services include ulcers, varices, fistulas, esophagitis, gastritis, congenital abnormalities, inflammatory bowel disease, enteritis, colitis, proctitis, duodenal diverticula, malabsorption syndromes, hepatitis, cirrhosis, cysts, abscesses, pancreatitis, polyps, certain hemorrhoids, splenomegaly, hernias, recent abdominal surgery, GI bypass or stomach stapling, and artificial GI openings.

Did you know?

As many as 20% of Americans have been infected by the fungus known as Histoplasmosis. While most people are asymptomatic or only have slight symptoms, infection can progress to a rapid and potentially fatal superinfection.

Did you know?

According to research, pregnant women tend to eat more if carrying a baby boy. Male fetuses may secrete a chemical that stimulates their mothers to step up her energy intake.

Did you know?

Despite claims by manufacturers, the supplement known as Ginkgo biloba was shown in a study of more than 3,000 participants to be ineffective in reducing development of dementia and Alzheimer’s disease in older people.

Did you know?

Methicillin-resistant Staphylococcus aureus or MRSA was discovered in 1961 in the United Kingdom. It if often referred to as a superbug. MRSA infections cause more deaths in the United States every year than AIDS.

Methicilli ...

For a complete list of videos, visit our video library