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PMPlease help me to understand short-term decision - Shutdown decision

PPhung4y ago
Hello everyone, Please help me with the illustration 3 page 207-208 (short-term decision) I do not know why profits is booted from $4,000 to $9,000 in the solution paragraph. Thank you?
John MoffatJohn MoffatTutor4y ago#1
It would help if you wrote which book you are referring to :-)
PPhung4y ago#2
Hello Mr. John, It is the textbook of BPP Learning Media. This illustration is also mentioned in your video about Shutdown probblem. Thank you for your help.
John MoffatJohn MoffatTutor4y ago#3
I do not have the BPP Study Text - only the Revision Kit. As far as the example in my lectures is concerned, the profit does not go from $4,000 to $9,000. The profit currently is $5,000 (as per the question). If they stop Rooks and do Crowners instead then the incremental (extra) profit resulting is $4,000 (for the reasons I explain in my lecture), and therefore the new profit will be $5,000 + $4,000 = $9,000.
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