1. BeeDon Co. has a large 2-story garage facility in downtown Columbia. The company has spent $1.0 million in renovation expenses. It can sell this garage now for $4 million.The company is now trying to decide if they should demolish this garage and build a much larger 5-story garage on the site. Demolition-and-Construction costs will be $3 million and the company expects to sell the new garage (if built) for $8 million in 2 years.

   Which of the costs and values identified above should be or should not be included in the decision to demolish and build (or not) the new garage facility?

   I. $1.0 million should not be included because it is a sunk cost.

   II. $3.0 million should not be included because it is irrelevant cost.

   		I and II
   		I only
   		II only
   		None of the above