declining market inc is considering the problem of when to stop production of a part 696925

Declining Market, Inc. is considering the problem of when to stop production of a particular product in its product line. Sales of the product in question have been declining, and all estimates are that they will continue to decline. Capital equipment used to manufacture the product is specialized but can be readily sold as used equipment. If the decision rule for this case says “Keep producing the product as long as its contribution to net earnings is positive” what, if anything, is wrong with that? [Contribution to new earnings, where
t is the tax rate, is (1
t) (Sales Variance cost Depreciation on equipment used to manufacture product).]Declining Market, Inc. is considering the problem of when to stop production of a particular product in its product line. Sales of the product in question have been declining, and all estimates are th