Capital investment Which of the following should be considered in capital investment (project) decisions?

Required:

a. Provide the amount of the cost if it should be included, or state if it should not be included. Write a brief explanation justifying your answer. A firm has a parcel of land that can be used for a new plant site or be sold for $750,000

b. A new product will generate new sales of 500 units at $50 each, but 100 current customers will switch from the current product which sells for $40 each.

c. A firm has spent $2 million on research and development on a new product. The firm has decided to go ahead with manufacturing the product.

d. Factory floor space of 10.000 square metres is being charged at $0.24 per square metre. This space is currently unused, but will now be used for a project.

e. Shipping and installation costs of $15.000 for equipment to produce a new product.

f. Your firm has been leasing out office space for $1000 per month that will now be used for a project.