Louie Optics manufactures a underwater digital camera. The company’s newest model is very popular, but it has an inventory of 5,000 old models for which there is little demand. The company is considering the following options for disposing of these old models:
1. Sell them to a discount mail-order company at a total price of $1,900,000. The mail-order firm would then sell these old models at a unit price of $480.