A large automobile-parts plant was constructed four years ago in an Ontario city served by two railroads. The PC Railroad purchased 40 specialized 20-metre freight cars as a direct result of the additional traffic generated by the new plant. The investment was based on an estimated useful life of 20 years. 

Now the competing railroad has offered to service the plant with new 29-metre freight cars, which would enable more efficient shipping operations at the plant. The automobile company has threatened to switch carriers unless PC Railroad buys 10 new 29-metre freight cars. 

The PC marketing management wants to buy the new cars, but PC operating management says. “The new investment is undesirable. It really consists of the new outlay plus the loss on the old freight cars. The old cars must be written down to a low salvage value if they cannot be used as originally intended. 

Evaluate the comments. What is the correct conceptual approach to the quantitative analysis in this decision?