A company reviewed their inventories of products and found that they have 5,000 units of a product that is now obsolete and cannot be sold as is. The company's original cost of this inventory is $175,000. The inventory can be sold for scrap for $5,000 or it can be upgraded at a cost of $22 per unit. If they upgrade the inventory, it can be sold for $25 per unit.

What is your recommendation? Identify the options in the decision and prepare a differential analysis to support your recommendation. Does it make sense to invest $110,000 into obsolete inventory? After all, the inventory has already cost the company $175,000.

Inventories. (10 points total). A company reviewed their inventories of products and found that they have 5,000 units of a product that is now obsolete and cannot be sold as is. The company's original cost of this inventory is $175,000. The inventory can be sold for scrap for $5,000 or it can be upgraded at a cost of $22 per unit. If they upgrade the inventory, it can be sold for $25 per unit. What is your recommendation? Identify the options in the decision and prepare a differential analysis to support your recommendation. Does it make sense to invest $110,000 into obsolete inventory? After all, the inventory has already cost the company $175,000