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Armstrong Corporation manufactures bicycle parts. The company currently has a $20,200 inventory of parts that have become obsolete due to changes in design specifications. The parts could be sold for $7,700, or modified for $10,700 and sold for $21,700.

Required:

1. Identify the relevance of the data given in the exercise to the decision about what to do with the obsolete parts.
2. Calculate the benefit under each alternative for disposing of the obsolete parts.