Question 1 - A $433,000 revamping project is underway for the receiving dock of hardware wholesaler. The completed project is expected to provide future benefits for which the wholesaler would have been willing to pay up to $500,000 if necessary.
However, new information has been received that the entire facility will be shut down when its lease expires, leading to a new estimate that the future benefits of the revamp are worth only $300,000. If the revamping project is curtailed quickly, the wholesaler can save the last $150,000 of its cost.
Should this be done?