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    Central Medical Supply: refit obsolete testing equipment or sell it. Analyze options, Tripac

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    Central Medical Supply, Inc., a manufacturer of medical testing equipment, has $240,000 worth of an obsolete line of testing equipment. The obsolete equipment can be adapted to fit another line of testing equipment at a cost of $64,000; the market value would then be $136,000. However, Tripac offered to purchase the obsolete equipment as is for $88,000.

    15. Which alternative should Central select?
    a. scrap the inventory at no additional cost
    b. rework the inventory at an additional loss of $304,000
    c. rework the inventory and improve profits by$69,000
    d. sell the inventory to Tripac

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    Unless there is other information regarding splitting the costs for the other line of business I would choose d. sell the inventory to ...

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    The solution selects a response and includes explanations to support the response.

    $2.19

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