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Shrimp Galore,a Shrimp Harvesting Business in British Columbia,has a 30-Year

Question 94

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Shrimp Galore,a shrimp harvesting business in British Columbia,has a 30-year loan on its shrimp harvesting boat.The annual loan payment is $25,000 and the boat has a market (salvage) value that exceeds its outstanding loan balance.Prior to the 2015 shrimp harvesting season,Shrimp Galore's accountant predicted that at expected market prices for shrimp,Shrimp Galore would have a net loss of $55,000 after paying all 2015 expenses (including the annual loan payment).In this case,what should Shrimp Galore do

Shrimp Galore,a shrimp harvesting business in British Columbia,has a 30-year loan on its shrimp harvesting boat.The annual loan payment is $25,000 and the boat has a market (salvage) value that exceeds its outstanding loan balance.Prior to the 2015 shrimp harvesting season,Shrimp Galore's accountant predicted that at expected market prices for shrimp,Shrimp Galore would have a net loss of $55,000 after paying all 2015 expenses (including the annual loan payment) .In this case,what should Shrimp Galore do


A) It should produce nothing and experience a loss of $25,000.
B) It should produce nothing and experience a loss of $55,000.
C) It should continue to operate even though it predicts a loss of $25,000.
D) It should continue to operate even though it predicts a loss of $55,000.

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