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A firm has spent $315,000 on research developing a new type of quality control system. For this system to now be implemented, the firm will
A firm has spent $315,000 on research developing a new type of quality control system. For this system to now be implemented, the firm will need to expand into an empty building that it currently owns. An additional $210,000 will be required for new equipment and building improvements. The firm was offered $685,000 last week for that building, but it has not responded to the offer yet. Labor and material costs are estimated at $44.65 per system. Interest expense on the loan needed to finance the production of this new system will be $17,600 per year. Which one of the following choices correctly identifies the sunk cost(s)
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