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Pepper Ltd. delivers 340 units of product to Salt Corp. The sales price was $180 per unit, and Pepper's cost was $108 per unit. Pepper
Pepper Ltd. delivers 340 units of product to Salt Corp. The sales price was $180 per unit, and Pepper's cost was $108 per unit. Pepper has agreed that Salt may return any unused product within 60 days and receive a full refund. Based on historical experience with Salt, Pepper estimates that 5% of the units will be returned, but Pepper will be able to resell any returned units. Required: 1. What is the value of the right to recovery asset? Right to recovery asset 2. What value would you assign to the right to recovery asset if the units would have to be sold at a reduced price of $54 per unit? Right to recovery asset
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