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he Todd Lease is operated by Tyler Corporation. The foreman of the Todd Lease aust make a decision regarding the replacement of a pumping unit
he Todd Lease is operated by Tyler Corporation. The foreman of the Todd Lease aust make a decision regarding the replacement of a pumping unit on the lease. he foreman has identified three possible alternatives:
Alternative
Purchase a new pumping unit. The foreman has located a vendor willing to sell the unit needed for a delivered cost of $FOB destination ie the manufacturer pays freight to the destination point
Alternative
The Odessa Lease, which is also operated by Tyler Corporation, has a surplus pumping unit that could be used. If the Odessa Lease equipment is used, the Odessa Lease would be charged with the cost of repairing the unit that would then be transferred to the Todd Lease at Condition B
Alternative
The Midland Lease, which is also operated by Tyler Company, has a surplus pumping unit that could be used. If the Midland Lease pumping unit is used, the equipment would be transferred unrepaired at Condition C
Other information:
tableTyler's Working Interest,Unit Repair Costs,Trucking CostsTodd Lease,Odessa Lease,$Midland Lease,
The current market price for the unit is $
REQUIRED: Determine what the foreman on the Todd Lease should do
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