Rosen, Inc

Multiple Choice

Rosen, Inc.has 10,000 obsolete calculators, which are carried in inventory at a cost of $20,000.If the calculators are scrapped, they can be sold for $1.10 each (for parts) .If they are repackaged, at a cost of $15,000, they could be sold to toy stores for $2.50 per unit.What alternative should be chosen, and why?

A) Scrap; profit is $1,000 greater.
B) Repackage; revenue is $5,000 greater than cost.
C) Scrap; incremental loss is $9,000.
D) Repackage; receive profit of $10,000.