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The chief financial officer (CFO) of New Age Fashion Ltd. has just received a request from a project manager to authorize an expenditure in the
The chief financial officer (CFO) of New Age Fashion Ltd. has just received a request from a project manager to authorize an expenditure in the amount of 45,000. The manager states that this expenditure is necessary for the last stage development of a space navigation system , which is based on a programming language called Xtor. As a space engineer and financial manager, you know that Xtor is almost obsolete and is being replaced by alternatives that provide better cross-platform compatibility. However, the project manager insists that they should continue with the last tranche of payment because over 1.5 million has already been spent on developing this navigation systemIt would be a shame to waste all the time and resources that have been invested. Advise the CFO regarding whether she should authorize the 45,000 proposed expenditure . Use marginal cost -benefit analysis to explain your reasoning
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