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What should company do based on financial considerations

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Reference no: EM132997796

An uninsured boat costing $96,000 was wrecked the first day it was used. It canbe either sold as-is for $9,600 cash and replaced with a similar boat costing $98,000 or rebuilt for$81,000 and be brand new as far as operating characteristics and looks are concerned.

Problem 1: What is the difference in cost between the two options?

Problem 2: Based on financial considerations, what should the company do?

A. Sell as-is for $9,600 cash and replace with a similar boat costing $98,000.

B. Rebuild for $81,000.

Reference no: EM132997796

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