Chapter $11$ Homework

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$5$

Part $2$ of $7$

$2$ points

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Required information

Exercise $11-30($Static$)$ Relevant Cost Exercises $[$LO $11-1,11-2,11-3,11-4,11-7]$

$[$The following information applies to the questions displayed below.$]$

Each of the following situations is independent:

Part b $($Static$)$

Disposal of Assets A company has an inventory of $2,000$ different parts for a line of cars that has been discontinued. The net book value $($NBV$)$ of this inventory is $$50,000.$ Either the parts can be re$-$machined at a total additional cost of $$25,000$ and then sold for $$30,000,$ or the parts can be sold as$-$is for $$2,500.$

Required:

Is there a net benefit or a net loss from remachining the parts versus scrapping the parts?