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17. (10 points) Pratt Company has old inventory on hand that cost $15,000. Its scrap value is $20,000. The inventory could be sold for $50,000

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17. (10 points) Pratt Company has old inventory on hand that cost $15,000. Its scrap value is $20,000. The inventory could be sold for $50,000 if manufactured further at an additional cost of $15,000. What should Pratt do? a. Sell the inventory for $20,000 scrap value b. Dispose of the inventory to avoid any further decline in value c. Hold the inventory at its $15,000 cost d. Manufacture further and sell it for $50,000 18. (10 points) Sala Co. is contemplating the replacement of an old machine with a new one. The following information has been gathered: Old Machine New Machine Price $300,000 $600,000 Accumulated Depreciation 90,000 -0- Remaining useful life 10 years -0- Useful life -0- 10 years Annual operating costs $240,000 $180,600 If the old machine is replaced, it can be sold for $24,000. The net advantage (disadvantage) of replacing the old machine is a. $18,000 b. $24,000 c. $(6,000) d. $(60,000)

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