Whispers Inc. has $150,000 of inventory that suffered minor smoke damage from a fire in the warehouse. The company can sell the goods "as is" for $70,000; alternatively, the goods can be cleaned and shipped to the firm's outlet centre at a cost of $48,000. There the goods could be sold for $90,000. What alternative is more desirable and what is the relevant cost for that alternative?

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The Answer of Whispers Inc. has $150,000 of inventory that suffered minor smoke damage from a fire in the warehouse. The company can sell the goods "as is" for $70,000; alternatively, the goods can be cleaned and shipped to the firm's outlet centre at a cost of $48,000. There the goods could be sold for $90,000. What alternative is more desirable and what is the relevant cost for that alternative?