1- A company has an inventory of 1,00 assorted parts for a line of product that has been discontinued. The inventory cost is $75,000. The parts can be either (a) re-machined at total additional costs of $25,000 and then sold for $30,000 or (b) sold as scrap for $5,000. Which action is more profitable? Show your calculations.

2- A machine, costing $50,000 and uninsured, is wrecked in its first year of operation. It can be either (a)disposed of for $15,000 cash and replaced with another forklift costing $50,000 or (b) repaired for $30,000, and thus be brand-new as far as operating characteristics and looks are concerned. Which action is less costly? Show your calculations.