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Armstrong Corporation manufactures bicycle parts. The company currently has a $21,000 inventory of parts that have become obsolete due to changes in design specifications. The parts could be sold for $9,000, or modified for $12,000 and sold for $22,300.

Exercise 14-35 Part 1

Required: 1. Identify the relevance of the data given in the exercise to the decision about what to do with the obsolete parts.