Should signal scrap or rework the phones

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Problem - Signal mistakenly produced 1,350 defective cell phones. The phones cost $68 each to produce. A salvage company will buy the defective phones as they are for $40 each. It would cost Signal $86 per phone to rework the phones. If the phones are reworked, Signal could sell them for $140 each. Signal has excess capacity. Should Signal scrap or rework the phones?

Reference no: EM132952737

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