Shutting down production line-dispose of extrusion machine

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Your company has a customer who is shutting down a production line, and it is your responsibility to dispose of the extrusion machine. • The company could keep it in inventory for a possible future product and estimates that the reservation value is $250,000. • Your dealings on the secondhand market lead you to believe that there is a 0.4 chance a random buyer will pay $300,000, a 0.25 chance the buyer will pay $350,000, a 0.1 chance the buyer will pay $400,000, and a 0.25 chance it will not sell. • If you must commit to a posted price, what price maximizes profits?

Reference no: EM13985626

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