McDonald (Agricultural Engineers) Ltd recently built a machine for a farmer at a cost of...
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McDonald (Agricultural Engineers) Ltd recently built a machine for a farmer at a cost of 22,000. The farmer, however, was recently declared bankrupt and so is unable to take delivery of the machine. Another farmer has offered to buy the machine if certain adaptations are made. These adaptations will require four components, which are held in inventories. The components cost 800 each and are frequently used by the business. The current replacement price per component is 850 and their realisable value is 420 per component. To fit the components, skilled labour, which costs 18 per hour must be used. The job will take 16 hours and it will mean taking two workers off another job. This job could be done by semi-skilled workers, who are paid 12 per hour but have no work available until next week. The business has received an offer from an agricultural supplier to buy the machine in its current condition for 10,000. What is the minimum price at which the business should sell the machine after the adaptations have been made? (Enter an integer.)
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