Question
Two months ago, Victory Corporation purchased 6,000 pounds of Hydrol, paying $20,400. The demand for this product has been very strong since the acquisition, with
Two months ago, Victory Corporation purchased 6,000 pounds of Hydrol, paying $20,400. The demand for this product
has been very strong since the acquisition, with the market price jumping to $4.05 per pound. (Victory can buy or sell
Hydrol at this price.) The company recently received a special-order inquiry, one that would require the use of 5,300
pounds of Hydrol. Which of the following is (are) relevant in deciding whether to accept the special order?
The 700-pound remaining inventory of Hydrol.
The $4.05 market price.
The $3.40 purchase price.
6,000 pounds of Hydrol.
Two or more of the above factors are relevant
(provide calculations)
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