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in page 476 at the part of in practice, answer the question below that

EXAMPLE11.1chased3yearsearlierfor$237,000,byretrofittingitwiththecomputerizedMyLabFinanceSolutionVideotrolsystem,itwouldbeworthnothing.JankowisintheprocessofestimatingthelaborandmaterialscostsofretrofittingthesystemtodrillpressX12andthebenefitsexpectedfromtheretrofit.The$237,000costofdrillpressX12isJankowEquipmentisconsideringenhancingitsdrillpressX12,whichitpur-controlsystemfromanobsoletepieceofequipmentitowns.Theobsoleteequipmentcouldbesoldtodayfor$42,000,butwithoutitscomputerizedcon-asunkcostbecauseitrepresentsanearliercashoutlay.Itwouldnotbeincludedasacashoutflowwhendeterminingthecashflowsrelevanttotheretrofit CHAPTER 11 Capital Budgeting Cash Flows 477 decision. However, if Jankow uses the computerized control system of the obsolete machine, then Jankow will have an opportunity cost of $42,000, which is the cash the company could have received by selling the obsolete equipment in its current condition. By retrofitting the drill press, Jankow gives up the opportunity to sell the old equipment for $42,000. This opportunity EXAMPLE11.1chased3yearsearlierfor$237,000,byretrofittingitwiththecomputerizedMyLabFinanceSolutionVideotrolsystem,itwouldbeworthnothing.JankowisintheprocessofestimatingthelaborandmaterialscostsofretrofittingthesystemtodrillpressX12andthebenefitsexpectedfromtheretrofit.The$237,000costofdrillpressX12isJankowEquipmentisconsideringenhancingitsdrillpressX12,whichitpur-controlsystemfromanobsoletepieceofequipmentitowns.Theobsoleteequipmentcouldbesoldtodayfor$42,000,butwithoutitscomputerizedcon-asunkcostbecauseitrepresentsanearliercashoutlay.Itwouldnotbeincludedasacashoutflowwhendeterminingthecashflowsrelevanttotheretrofit CHAPTER 11 Capital Budgeting Cash Flows 477 decision. However, if Jankow uses the computerized control system of the obsolete machine, then Jankow will have an opportunity cost of $42,000, which is the cash the company could have received by selling the obsolete equipment in its current condition. By retrofitting the drill press, Jankow gives up the opportunity to sell the old equipment for $42,000. This opportunity