ssume that a recently decommissioned aircraft carier the USS

ssume that a recently decommissioned aircraft carier, the USS Bonefish, is estimated to contain approximabely 40 tons of recyclable materials able to be sold for appromatity S334 min Telow bid for dsmarting and tansporting the ship materials to appropilbolses 535 3 mion Recydng and dsutg he ship would create about 500 jobs for about a year in the Rust Beit This geographic area has been experiencing recond-high unemployment rates in recent years Read the resuiremerts Requirement 1. is it more nancially advantageous to sink the ship (assume that it costs approximately $1.3 milion to tow a ship out to sea and sink it) or t diamantie and recycle ? Show your calculations.(Enter dollar amounts in milons. Enter the net difference with a minus sign or parentheses is the cost to diamande and recyde is less thah the cost to sink) Choose trom any list or enter any number in the input felds and then contirnue to the next question Next . Previous MacBook Pro 0 A S D F G HJ eturn command option

Solution

Alternative 1: Dismantling and Recycling the materials

Alternative 2: Low the ship out to sea and sink the ship

Dismantling &Transportation Exp

Relevant Cost

$ 35.3 million

Cost of sinking the ship

Relevant Cost

$ 1.3 million

Contribution from sale of Recyclable Materials

Relevant Revenue

$ 33.4 million

Net Cost of Dismantling& Recycling)=Cost of dismantling-Contribution from sale of dismantled material

$ 1.9 million

Cost to dismantle and Recycle ( $ 35.3-$ 33.4) = $ 1.9 million

Less: Cost of sinking the ship                               = $ 1.3 million

Net difference                                                        =0.6 million

Conclusion: It is financially advantageous to sink the ship .The cost of sinking the ship is less than the cost of dismantling and selling the recycled material by 0.6 million but a point to be noted is that though the cost of dismantling & recycling materials is higher , it provides 500 jobs for a year in a geographical area that is experiencing record high unemployment rates in recent years.

Dismantling &Transportation Exp	Relevant Cost	$ 35.3 million
Cost of sinking the ship	Relevant Cost	$ 1.3 million
Contribution from sale of Recyclable Materials	Relevant Revenue	$ 33.4 million
Net Cost of Dismantling& Recycling)=Cost of dismantling-Contribution from sale of dismantled material		$ 1.9 million