An engineering company has been offered the opportunity to bid for a contract which requires a special

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An engineering company has been offered the opportunity to bid for a contract which requires a special component. The company has a component in its current inventory, which has a net book value of £250. This component could be used in the contract, but would require modification at a cost of £50. There is no other foreseeable use for the component held in inventory. Alternatively, the company could purchase a new specialist component for £280. What is the relevant cost of the component required for this contract?

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