Bhimani, Horngren,
Datar and Rajan,
Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012 that is not progressing perform better than their peers who follow traditional advice to stick with it Many
managers like the old adage, Use it up,
wear it out, make it door do without They think that past costs are relevant. This problem often occurs in the context of rapid technology changes. Managers argue that they need to recoup their investment in the old technology before investing in anew technology. However, customers may not continue to buy products based on old technology. Managers should compare the expected net inflows from the new technology with the expected net inflows from the old technology.
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