Business, 10.09.2021 18:10 honeybaby675610

Last year, a toy manufacturer introduced a new toy truck that was a huge success. The company invested $6.50 million in a plastic injection molding machine (which can be sold for $6 million immediately) and $100,000 in plastic injection molds specifically for the toy (not valuable to anyone else). The cost of labor and materials necessary to make each truck runs about $5. This year, a competitor has developed a similar toy, significantly reducing demand for the toy truck. Now, the original manufacturer is deciding whether it should continue production of the toy truck? Should you shut down?

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Last year, a toy manufacturer introduced a new toy truck that was a huge success. The company invest...

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