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A successful sushi chain in Hong Kong spent $500,000 to conduct a study on whether to open a location in the United States. The study
A successful sushi chain in Hong Kong spent $500,000 to conduct a study on whether to open a location in the United States. The study showed that the best place for the company to open its first location would be in Chicago. Whenconducting its capital budgeting analysis, how should the company account for the cost of the study when estimatingthe amount of the initial investment that the new store will require? The company should indude half of the cost of the study in the initial investment. The company should indude the cost of the study in the amount of the initial investment. The company should ignore the cost of the study. A large soft-drink company currently produces regular cola and diet cola. It is considering introducing a new soft drink that tastes like regular cola but has zero calories like the diet cola. The new zero-calorie drink that tastes likeregular cola is most likely to produce externality
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