10.4

Holmes Company has already spent $50,000 to harvest peanuts. Those peanuts can be sold as is for $69,500. Alternatively, Holmes can process further into peanut butter at an additional cost of $697,500. If Holmes processes further, the peanut butter can be sold for $1,081,125. (a) Prepare a sell as is or process further analysis of income effects. (b) Should Holmes sell as is or process further