Question
Prevatte Corporation purchases potatoes from farmers. The potatoes are then peeled, producing two intermediate products-peels and depeeled spuds. The peels can then be processed further
Prevatte Corporation purchases potatoes from farmers. The potatoes are then peeled, producing two intermediate products-peels and depeeled spuds. The peels can then be processed further to make a cocktail of organic nutrients. And the depeeled spuds can be processed further to make frozen french fries. A batch of potatoes costs $48 to buy from farmers and $14 to peel in the company's plant. The peels produced from a batch can be sold as is for animal feed for $30 or processed further for $19 to make the cocktail of nutrients that are sold for $50. The depeeled spuds can be sold as is for $41 or processed further for $30 to make frozen french fries that are sold for $62.
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