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Lampley Company: Breakeven Calculations

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The Lampley Company has 2,000 obsolete items in its inventory which are valued at $22 each. If the item are reworked they could be sold for $30 each otherwise they would be sold for only $5 each. If Lampley Company decides to re-work the items, how much should the company be willing to invest to ensure that they would at least break even on the sale of the items?

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Solution Summary

This brief solution shows step-by-step calculations to determine the breakeven of re-working the items.

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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