Holmes Company produces a product that can be either sold as is or processed further. Holmes has alreadyspent $50,000 to produce 1,250 units that can be sold now for $67,500 to another manufacturer. Alternatively,Holmes can process the units further at an incremental cost of $250 per unit. If Holmes processes further, theunits can be sold for $375 each. Should Holmes sell the product now or process it further?
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