3DN Valuing Goods and Services for External Sale in Money
Valuing goods and services for external sale in money
- Again, just making up numbers, say that tomatoes are selling in the market for $2.00 per pound. The CIE first makes its tomatoes available to its shareholders. If any are left the CIE would then preserve as many tomatoes as it expected its shareholders to want over the winter. Some of the tomatoes would be used in the CIE's pizza joint. Any fresh tomatoes left over could be sold for cash in the market. The CIE would want to get the best price available, but, since it has no cash cost in the product, it could easily offer them at any price in order to sell them.
- There are two reasons to not undercut the market price. The first is to maximize cash available for reinvestment. The second is to maintain the cash value of the shares.
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