Gilpin

Company has

11,000

obsolete lamps carried in inventory at a cost of

$15.00

each. They can be sold as they are for

$3.50

each. They can be reworked, however, at a total cost of

$71,500

and sold for

$11.00

each.

Requirement

Determine whether it is worthwhile to rework these lamps.

First determine the formula to calculate the net return under each alternative, then calculate the net return under each alternative. (Complete all input cells. Enter a "0" for amounts with a zero balance.)

		-		=	Net return
Sell as is		-		=
Sell after rework		-		=

Gilpin

Company

should not

should

rework the lamps.