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Noble Chemical has spent $240,000 to refine 71,000 gallons of acetone, which can be sold for $2.30 a gallon. Alternatively, Noble Chemical can process the

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Noble Chemical has spent $240,000 to refine 71,000 gallons of acetone, which can be sold for $2.30 a gallon. Alternatively, Noble Chemical can process the acetone further. This processing will yield a total of 59,000 gallons of lacquer thinner that can be sold for $3.20 a gallon. The additional processing will cost $0.85 per gallon of lacquer thinner. To sell the lacquer thinner, Noble Chemical must pay shipping of $0.24 a gallon and administrative expenses of $0.12 a gallon on the thinner. Requirements 1. Identify the sunk cost. Is the sunk cost relevant to Noble's decision? Why or why not? 2. Should Noble sell the acetone as is or process it into lacquer thinner? Show the expected net revenue difference between the two alternatives. Requirement 1. Identify the sunk cost. Is the sunk cost relevant to Noble's decision? Why or why not? The amount spent to refine the acetone is a sunk cost that does further. Consequently, this sunk cost of is differ between alternatives of selling as is or processing to the sell or process further decision. Choose from any list or enter any number in the input fields and then click Check Answer. ? parts remaining Clear All Check Answer 2 Pemaining Requirements 1. Identify the sunk cost. Is the sunk cost relevant to Noble's decision? Why or why not? 2. Should Noble sell the acetone as is or process it into lacquer thinner? Show the expected net revenue difference between the two alternatives

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