Pratt Company Has Old Inventory on Hand That Cost $12,000

Multiple Choice

Pratt Company has old inventory on hand that cost $12,000. Its scrap value is $16,000. The inventory could be sold for $40,000 if manufactured further at an additional cost of $12,000. What should Pratt do?

A) Sell the inventory for $16,000 scrap value
B) Dispose of the inventory to avoid any further decline in value
C) Hold the inventory at its $12,000 cost
D) Manufacture further and sell it for $40,000