7.2 Your company currently produces and sells steel-shaft golf clubs. The Board of Directors wants you to look at introducing a new line of titanium bubble woods with graphite shaft.

Which of the following costs are not relevant?

I. Land you already own that will be used for the project and has a market value of

$700,000.

II. $300,000 drop in sales of steel-shaft clubs if titanium woods with graphite shaft are introduced.

III. $200,000 spent on Research and Development last year on graphite shafts.

a. I only

b. II only

c. III only

d. I and III only

e. II and III only